Steve Schwarzman on Dealmaking II: When They Hold All the Cards (A)

Blackstone Co-founder, Chairman, and CEO Stephen A. Schwarzman, whom Forbes has called “Wall Street’s Greatest Dealmaker,” played a major role in the negotiations that transformed Blackstone from a fragile startup in 1985 with $400,000 in capital into a dominant financial firm with $684 billion under management in mid-2021. Based on lengthy interviews with Schwarzman conducted by James Sebenius, this (A) case sets up and poses eight specific negotiation challenges in finance, trade, and not-for-profit settings that the Blackstone co-founder faced along the way. These challenges draw heavily on Schwarzman’s early negotiations at Blackstone, when the company was small, its future highly uncertain, and each deal vital for the firm. Without the benefit of Blackstone’s current scale and dominance, Schwarzman faced especially high barriers to success at that time. The present case series highlights the broad palette of Steve’s dealmaking skills, and especially focuses the challenges of hard bargaining, especially where the other side holds most of the cards. Readers of the (A) case are tasked with thinking through how they might handle these episodes and the broader lessons about the strategies and tactics of effective negotiation that they might draw. The (B) case describes how Schwarzman dealt with each challenge along with generalizations to enhance one’s effectiveness in negotiation. (A companion case series, "Steve Schwarzman on Dealmaking I: Becoming a 'Friend of the Situation'” (A) and (B), 922-005 and 922-006, explores several cases that focus on the more collaborative, joint problem-solving aspects of his approach.)