Stephen Schwarzman, Blackstone Group's CEO

Today, cell phones, computers, and the Internet dominate the communication world. Top executives are using these technological innovations to communicate results of the company. These innovations are quick, efficient, and decrease time spent in the office. However, there are some very successful leaders that still rely on interpersonal communication to present their results because they understand the importance of having everyone know what is going on within the company.

Although his name may sound unfamiliar, Stephen Schwarzman is one of today’s top financial leaders. Currently, he is the CEO of The Blackstone Group which is a prominent private equity firm located in New York City. The company controls “47 companies, with more than $85 billion in revenue from wildly different businesses” (Schwartz). Even though the Blackstone Group has evolved into a large multi-billion dollar corporation, Schwarzman has maintained his personal vision throughout the development of the company. He is effectively able to communicate both results and goals to all employees. In particular, every Monday, Schwarzman holds a variety of meetings to help keep everyone informed: “the mindset here is that everyone at the top must know exactly what's going on” (Schwartz). Schwarzman wants to keep a “close knit” environment so that all executives understand the direction in which the company is heading and then pass the information on to lower-leveled employees. By having Schwarzman and other top executive verbally describe what is occurring within the company, less information is lost in transactions. In addition, this promotes open communication between individuals, which allows everyone to understand events within the company.

“The meeting always starts with private equity before moving quickly to Blackstone's newer divisions - real estate at 10:30, followed by hedge funds at 2 P.M. in another conference room, and finishing up with Blackstone's debt business at 4. ‘We go over every client situation, every deal,’ says Schwarzman. And what about lunch? ‘You must be kidding. We don't have time for lunch,’ he jokes, echoing the fictional avatar of 1980s Wall Street, Gordon Gekko. In fact, thanks to a kitchen adjoining the boardroom, ample supplies of Perrier and coffee are an arm's reach away.”

(http://money.cnn.com/magazines/fortune/fortune_archive/2007/03/05/8401261/index.htm)

As shown in this example, Schwarzman places high value on operational key metrics. Schwarzman has been successful in communicating operations because he understands his role as the leader and is able to separate his ego from his job. As stated by Hamm, “effective leaders, by contrast, understand that their role is to bring out the answers in others. They do this by very clearly and explicitly seeking contributions, challenges, and collaboration from the people who report to them, using their positional power not to dominate by rather to drive the decision-making process” (Hamm). It is during the weekly meetings where Schwarzman allows all level executives answer and ask questions. Schwarzman recognizes the fact that he must utilize all of his employees if he wants to continue the success of The Blackstone Group. If he did not inform other individuals, the Blackstone Group would likely fail. In fact, even though he is the top leader, he usually remains passive at executive meetings and allows others to give input.

Because The Blackstone Group is not yet a publicly traded company, it was difficult to find any information about the communication of financial results. However, the company website is very detailed and offers a lot of insight into the organization’s vision and goals as well as a complete breakdown of the different sectors of the company. This helps the public understand the direction in which the company is headed. Please visit the company website if you want to learn more in-depth information about The Blackstone Group: http://www.blackstone.com/.

Resources:

Hamm, J. (2006). The Five Messages Leaders Must Manage. Harvard Business Review (May).

Schwartz article, see link above