Problems arise constantly in businesses, but an effective leader knows not only how to solve each one but how to prioritize them.
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"I think about what the one or two critical factors are," Schwarzman said. "What's creating this issue and how do I figure that out?"
He said by determining the root cause of the issue, sometimes it's easier to solve it.
Also, he shared it's crucial to determine which problem is the most important at the time.
"There could be 10 problems. I don't think about the smaller ones at all."
He said by focusing on the bigger issues, you can be more effective at solving them. However, some people will still nag you about those smaller issues.
"The biggest issue I find with people is they think everything that could be a problem is really a problem," Schwarzman said.
"Those little ankle-biters aren't really important, but they occupy your mind. I don't let them occupy mine."
Schwarzman also has an easy way to prioritize your problems.
"The one that can take you down is the one you spend time on," Schwarzman said. "The one with the biggest risk and biggest adverse result always jumps to the top of the pile."
He said it's important to trust your gut when analyzing what problems seems like it will cause the most damage.
Schwarzman recently wrote a book called "What It Takes: Lessons in the Pursuit of Excellence" which covers this subject matter as well as many others.