Steve Schwarzman, CEO of Blackstone, is not shy about handing out careers advice. Last year he cautioned against supposing you can leave an investment bank and have the sort of success he's had. Now, he's back, warning juniors of all the things that might destroy their finance careers before they've really begun.
In a long interview with the MBA website Poets and Quants, Schwarzman, who was a managing director at Lehman Brothers before moving into private equity, lists the following fatal errors when you're starting out in financial services.
"It’s very important that people understand that we only have people who want to be helpful, team-oriented, and believe in a meritocracy culture,” says Schwarzman. “We’re not looking for people who want to create more stress with people around them,” he adds. “So the firm internally should be a highly supportive environment and we’re very rigorous in making sure that’s what it is.”
"In finance, there is very little new. It is an apprentice business...there’s no need for you to invent things that other people understand...Typically, the biggest mistake that first-year MBAs make is wasting their time trying to figure out something...There isn’t extra credit for figuring it out yourself. They just want you to do it."
"You don’t need to take on too many assignments to be successful," says Schwarzman. Junior bankers think working on a lot of things is good and accepting everything is right. Wrong. "Since entry level people typically don’t know how long it takes to do anything, they all make the same mistake, which is that they accept too many things. And then they can’t finish them on time and they disappoint the people who asked them to work on those things."
If you have accepted too much work, say so.
"If you show up at the last moment and say, “I’m sorry I just couldn’t do your thing because I was doing something else,” you can make an enemy because you embarrassed someone senior to you who trusted you," says Schwarzman. "... as soon as you’re aware that you’ve taken on too much, you must go to someone senior and tell them what problem you’ve created for yourself. They will help you manage your way out of it so that all the work gets done, whether it gets done by you or gets done by someone else."
Whatever you do, don't wait until the last moment and then reveal you haven't completed a critical part of analysis.
Don't leave banking when you've only worked in the industry for a few years. "I’ve seen this with very smart younger people whose careers have typically been ruined by going out too early," says Schwarzman. Finance is an apprenticeship business, he adds: "...it takes a while to develop the skills and perspective to know what you should be doing when."
When you leave for something else and it doesn't work out, Schwarzman says it's very hard to slot back into banking.
Lastly, just because you're an excellent associate in an investment bank, that doesn't mean you'll be an excellent entrepreneur.
Entrepreneurialism is only for the best of the best, says Schwarzman. "You have to be extremely good, at the top of your group for sure, in terms of whatever aspect of finance that you’re in," he says. More than that, he says you have to be, "an independent person, who can deal with the isolation and the difficulties of being on your own.... You have to have supercharged energy and be prepared to go through a period when things are very, very harsh. That’s typically is not someone who’s an associate. They’re not even emotionally up to that kind of journey. Some of them don’t know that – and they wipe out."