Succession Planning

In What It Takes, Stephen Schwarzman treats succession as a structural vulnerability unique to people-driven firms. Asset management firms, he argues, “are so dependent on people and personalities that succession often becomes their Achilles’ heel. One generation stays on too long, the next generation gets tired of waiting, and firms lose momentum” — and regaining lost momentum is always much harder than sustaining it. The recurring failure mode is a leader who holds on too long while the bench grows restless.

His prescription is counterintuitive on timing: leaders should start working on succession before their drive peaks — “when their drive, their intellect, and their competitiveness are yet to peak” — rather than waiting until decline forces the question. In the book’s culture sections this sits alongside Schwarzman’s other team-and-culture rules: depersonalize the investment process, decide as a group, never let one person single-handedly green-light a deal, and run open Monday meetings.

Context: Succession planning is the organizational practice of identifying and developing future leaders so that the departure of a founder or executive does not destabilize the institution. In partnership-based businesses like private equity and asset management, where value concentrates in key individuals, it is a recurring strategic risk.

Where this appears

• What It Takes — Schwarzman frames succession as asset management’s “Achilles’ heel” and argues leaders must begin succession planning before their drive, intellect, and competitiveness peak; recurs in the book’s culture and firm-building sections.