Leadership and Culture with Blackstone

Michael C. Bush (00:00):

Hey, well, you know, black’s in our brand portfolio too. And look at the bottom of your shoes. Okay, there we go. There's the red. Okay, we're on brand again. Awesome, awesome. Good to see you.

Courtney della Cava (00:23):

It's great to be here. Thank you for having me.

Michael C. Bush (00:25):

Sure. So, Courtney, Blackstone, you know, I know a lot about it, but a lot of people don't. So can you help people understand what Blackstone is, what Blackstone does, and why? And something about the size and the magnitude of it.

Courtney della Cava (00:38):

Happy to give us some context. Happy to, I think, if you're like my family, you're like, Blackstone, BlackRock, black, pebble, like, what is this? Blackstone is the world's largest alternative asset manager. Like why? That's a big number. $1.1 trillion of assets, big number. To bring it down to what we do and how we work together, in my role, that includes 250 portfolio companies.

Courtney della Cava (01:04):

Hilton used to be a Blackstone portfolio company, one of our best investments, and UKG is our largest private equity investment. But companies like Supergoop and Spanx, small consumer, UKG Copeland, which is the largest or a leader in HVAC. So we've got all these companies, Michael, and across the company's annual revenue last year was about $225 billion, 700,000 employees. And that's where this all fits in. Which is this beautiful way for us to see what's happening across geographies, sectors, stages of growth. We pull the data, we ask for data, we collect the data, we analyze the data, and we use that data both to help us invest.

Courtney della Cava (01:54):

So for example, we were able to call inflation 18 months early, not 'cause we're brilliant, it's we have the data from all of our companies. And so we're able to use the data to help our companies operate more effectively, get ahead of things. So it's a really unique vantage point to be in. And it's human and it's 700,000 employees. So that's Blackstone.

Michael C. Bush (02:15): 

Okay. A major source of capital for growth for businesses. Why are companies leaning on private capital more now rather than IPOs?

Courtney della Cava (02:25): 

I think this surprised me. You and I talked about this and I did some research. The number of, well, if you look today, 86%. 86% of companies over $250 million of revenue are private. 86%. The number of public companies peaked in 1996 at 7,000. Today that number stands at 4,300. So the world is more private, is staying private, is going private. Why is that? I think in the old days you had to go public to access capital. And because today there are so many private sources of credit of capital, Blackstone included, you don't have to go public.

Courtney della Cava (03:05):

And there are benefits. We love a lot of our companies go public. We take companies private. We brought Cvent and Rover and Smartsheet, a public to private. But there are benefits to being private, allows you to kind of bring the curtain down. We've got these ambitious agendas and growth plans and it allows us just to focus on what we say, create long term value in a short term horizon. And so it allows us to do that without having to worry about quarterly, you know, returns and numbers and reporting and some of the compliance and some of these things. So I think, you know, when folks are surprised, private equity, private equity backed, and I often will hear, especially with boards, wanna be on a public board, understand that. But actually, if you look at the direction of travel, it's private and will continue. But I think that's a surprising trend for many.

Michael C. Bush (03:56):

You know, I was talking yesterday, a couple of people that are here from private, they are running a private equity firm. And, they were surprised when I told 'em how committed Blackstone is to culture. They were like, what? You know, so I'm not throwing any shade in, neither were they. 

Courtney della Cava (04:12):

Oh, I think I was before I joined.

Michael C. Bush (04:14):

They just didn't know. Okay. But talk about the importance of culture at Blackstone and customers of ours. And also the importance of it through your portfolio.

Courtney della Cava (04:27):

You know, Jen said it, and I've stolen it from her, she beat me to it today, but numbers follow people. We believe that it starts at our firm, right? Blackstone itself, you'd be surprised we have extraordinary people, but extraordinarily nice people. And so we say what makes a high-performance culture is not just having lots of smart people, but Michael, if you look in private equity, and if you look at in business, and we've done the analysis when deals go well, it's 'cause we had a killer leadership team and a high-performance organization.

Courtney della Cava (04:58):

When capital's impaired, when things go off the rails, deal fail. It's often we did not have the right leadership team, and organization. And you say, okay, why is that? Well, kind of obvious, but actually what we're trying to do is, is pacey. It's ambitious. We're trying to drive these extraordinary, as I say, long term results in a short term horizon. So we need leadership that is aligned to what we're trying to do. Not just generic great leadership, but have they done it. And I'll, we will get a little bit into what we look for, but we also need highly committed, engaged organizations that are aligned with the mission, engaged, showing up every day, passionate, confident, committed. Otherwise, we can't get to the other side.

Courtney della Cava (05:41):

And so we use, we will get into, we love Great Place To Work and we've, you know, doubled the number of our companies and seeing extraordinary results that come with that. But we also use engagement that surprises people. But you and I, I mean, you, you've been saying this before, most of us, we look at employee engagement scores in all of our companies as a leading indicator of business health that surprises people like these touchy feely. But we look at, and one of the things we don't mandate a lot across our portfolio companies, but we say, you need to do an engagement survey. Obviously you need to read it out and act on it. But we look at those numbers like we do attrition and a few other as leading indicators.

Courtney della Cava (06:18):

We've had businesses that are performing beautifully well, you look at the financials, you look at some of the leading indicators around business health engagement. And when those are dropping, you know, there's problems around the corner and it allows you to intervene and hopefully, you know, avoid those. So it's the only way we can do what we do. We use it as a tool to guide what's happening in the business. And like the secret recipe for success is great fit for purpose leadership and high performing cultures and teams.

Michael C. Bush (06:46):

So let's focus on leadership and tell us people something about your role there and what you look for to get that leader that's gonna create that great culture.

Courtney della Cava (6:58):

So the role I'm in, as I always say, the seat I rent is this wonderful role, which is primarily focused on all things people and human capital in our portfolio of 250 companies. The most important thing we can get right is the leadership. So when we're looking at investing in a company, we will diligence the company, all sorts of diligence, lots of commercial diligence, but we come in there and actually say, what is the team in place? Obviously they've done something extraordinarily well that we're interested in buying the company, but are they fit for purpose for that next chapter, right?

Courtney della Cava (07:33):

And so we assess them against what is it we need that next team to do? And every investment, there are a couple things. There's like two to three to four things. We call 'em value creation levers that we need that leadership team to do. And we less assess were they successful and what they did, but can they do what we need them to do? So we assess, and in many cases, the team that's in place are great. The incumbents, sometimes we add roles, we support them, we scaffold 'em. In some cases they're not. Either they've opted out, you know, they ran their marathon and they're ready, or they're not necessarily right for the next investment. But we focus a lot on, and not just the CEO, we believe obviously the CEO, she or he is absolutely essential. But we look at the C-suite, there's often new roles and then we look a couple levels down and it also extends to the board. We, again, building the chair, the board, all of those things in leadership. And what surprises folks, I think is beyond all of that. And then we get into the org health during diligence.

Courtney della Cava (08:28):

We're looking at things. We're scraping Glassdoor. We're conducting referencing, forensic referencing. We're trying to understand is it a high-performance culture? Do they have the capacity to do what we need them to do? Again, this pacey high ambition, and we're not necessarily looking for that. The day one, they have it, but can we get them there? 'cause if not, we won't get there. So leadership matters, it's the difference maker, but it's not alone, as we say, it's a team sport.

Michael C. Bush (08:56):

Well, if you think about the behaviors of a leader, what are the things that are attractive to you and the things that are like, uh, next? 

Courtney della Cava (09:06):

There are a lot of those. You and I have talked about this. I think people think, oh, private equity, you're looking for track record and results and financials. We care about that. When somebody successful, and again, context matters, were they successful in, I always say context matters for everything. But when were they successful? What was the context, the team, the situation, all of that. But we look at intrinsic traits, motivations a lot. You know, we often talk about what's under the layer. We care about things like resilience. The ability, this is a, this is a pacey high ambition sport. We need folks who are resilient, can bounce back. We look for people who are learners, as something that will resonate with everyone. If we have folks with low self-awareness, right? Can't talk about mistakes and learnings and what they're gonna do differently.

Courtney della Cava (09:56):

This learning, this listening, right, this chief listening, can they listen to others? Do they seek others? You know, it's very much what you always say about, we're looking for leaders who build followship. And the way to build followership is trust. And trust is a combination of transparency and vulnerability. And we are assessing for all of that. We need to build followership. We need leaders. We aren't expecting leaders who have all the answers. We worry when somebody has all the answers. We are looking for people who know when they don't have the answers, know where to go and know when to ask the questions. They're vulnerable. They know what they know. They know how to seek out the answers. They know how to bring in their team. They build, you know, diverse, inclusive, but more than anything, they build a culture of trust and transparency. That's then this, this formula of engagement. But I think it surprises folks that the how deep we go and understanding motivations, how they operate and probably more than anything can they learn. Are they open to feedback and partnership?

Michael C. Bush (10:55): 

Now what's an indicator for you that somebody is a learner?

Courtney della Cava (11:01):

Simple. Let's talk about a mistake. Let's talk about when you didn't get it right. You'd be surprised how many people say, I don't really have anything that's been a stellar track record. That's kind of the next right thing.

Michael C. Bush (11:16): 

Actually. I wouldn't be surprised.

Courtney della Cava (11:21):

That's a next, yeah. Then there's, the, I made a mistake, but it wasn't my fault. I hired the wrong people. Right. That's a good one too. You know, my mistake was letting Susie or Johnny have it. What lights us up and we all want is, look, I haven't gotten it all right. I mean, if you're taking risks and ambitious, you're making mistakes. What we want are people who acknowledge it and learn from them. And so the bonus is, let me tell you, when I didn't get it right, here was the situation. Here's where I messed up. What you really want is, here's what I learned and here's what I do differently as a result.

Courtney della Cava (12:02):

As a result now I'm always careful, I double check that I surround myself with people who call me on it, who, you know, mitigate my flatter spots. That's what I'm looking for in conversations with, you know, we'll do this with candidates. We bring in new information. Do they assimilate the new information? Are they holding tight to their position? Right? Are they able to adapt right now, the disruption, the velocity, I mean, there is nothing that is staying the same. And so we'll often say, well, let us introduce something new. This just came in. Or here's some new data. Are they, you know, cognitively, are they able to capture that assimilate, pull it together and adapt if they're still back and clawing onto that original point of view, we're not even open. Again, we don't have learning agility.

Michael C. Bush (12:49):

Yeah. You know, I'm glad this is videoed 'cause I'd like to be taking notes. 'Cause you're laying out the script to success. And so not everybody's gonna be, you know, a CEO of a Blackstone portfolio company, but we have an audience full of people working in companies. Everybody wants to grow, everybody wants to do that. And so to me, you're talking about the things that create the, that make you attractive so that people want you to grow as well. You know, you're talking about humility, you're talking about learning, being able to confront your mistakes and talk about 'em to move forward without fear that if I tell 'em about my mistake, then they're not gonna, okay. So do you have the, you know, the perseverance to go through that uncomfortable moment of sometimes describing the darkest moment maybe of your career.

Michael C. Bush (13:39): 

But as we, for our community of growers and a few other thousand people that are zooming in, what advice do you have for people who really want to grow their careers?

Courtney della Cava (13:51):

Before I answer that, I do wanna hit something that I think surprises folks that I'm, I was remiss in, not. I think it surprises when we look at building high-performing, extraordinary companies, Michael, we look at obviously CEO and the board. We look at CFO, obviously that matters. But what surprises folks is that triad, we absolutely focus on getting great CHROs. It's the only way they're the right, the linchpin of all of the things we're talking about. So we talk about the triad a lot and again, as people are like private equity, Blackstone, it's the linchpin. It's the linchpin on all the change, all the things we're talking about, all the data and insight. So I think that's one just relative to that.

Courtney della Cava (14:32):

But growing, I think it's being open-minded. You often hear folks who, and we meet a lot of folks who have had incredible careers and they've been on ladders, right? These linear ladders of success, bigger scale, bigger scope, bigger, bigger, bigger. More and more, more we love.

Courtney della Cava (14:52):

And some of our highest performing people just in general have been on a lattice. They've gone left, they've gone right. They've taken risks, they've followed people they believed in. They were curious about a sector. It's less this picture perfect. Linear. That's great. And with that, the risk, the learning, the greatest growth often comes in those uncertain. I mean, I always say, and part of the reason I took this role is uncomfortable. I was repotting. And you know, it's uncomfortable to be 30 years into your career, into something that you have some strengths, but it is unknown. But that's where the greatest growth comes from.

Courtney della Cava (15:29):

And so I want folks, whether it's an assignment, raising their hand for an assignment, for applying for a role that maybe isn't necessarily linear, but they're curious, taking a class in something, but it's that uncomfortable, you know, it's that everyone I think knows what we mean when you're a little outta your depth, you're uncomfortable. But boy is that the most exciting growth spurt that comes. And it doesn't mean it always leads to success. Some of the greatest lessons and growth come from lessons learned and mistakes.

Courtney della Cava (15:57):

And so that's what we're looking for. We're encouraging folks to explore, to be open-minded, you know, kind of winning in life and work and all of those things comes with that. And when folks have the kind of the linear and some folks have done really well linearly, but I just don't think that's how we learn. That's how you gain skills. I just don't think that that's the name of the game anymore.

Michael C. Bush (16:19): 

Well, thank you very much. You dropped gold nuggets all over the place. I'll watch the recording and write 'em down. Please give Courtney a round of applause.

Courtney della Cava (16:26): 

Thank you for having me. Thank you very much. Take care.