Chapter 1

The Art of Being Unreasonable

I am unreasonable.

It’s the one adjective everyone I know—family, friends, associates, employees, and critics—has used to describe me.

Occasionally, some of them have also called me crazy or nuts. But they’ve all told me at some point that I was being unreasonable because my goals were unrealistic, my deadlines couldn’t be met, my ideas were far-fetched, or my approach trampled on the conventional wisdom.

But I believe that being unreasonable has been the key to my success. In this book I want to show you how applying unreasonable thinking can help you achieve goals others may tell you are out of reach, just as it has for me.

Over the past six decades I have had four careers: accounting, homebuilding, retirement savings, and philanthropy. I became the first person to build two Fortune 500 companies from the ground up in two different industries. The $6 billion I earned in business is now being used to help reform public education in America, assemble two world-class art collections and make them widely accessible, and provide critical start-up funding for cutting-edge biomedical research.

What gives me the most satisfaction is that all my careers have demanded that I meet people’s essential needs—helping them realize their dreams of homeownership and a secure retirement, educating their children, experiencing great art, and living a healthier life. Each has also required me to be quite unreasonable—to have outsized ambition, discipline, energy, and focus and to have the confidence to ignore people who said I couldn’t do it. If this book does nothing else, I hope it helps you silence the voice of conventional wisdom that too often keeps people from even attempting to achieve their goals.

Through my careers there has been one constant: a paperweight on my desk, a gift my wife, Edye, gave me some time after we were married in 1954. It sat on the tiny desk in a shared office in Detroit, Michigan, where, as a young CPA, I first envisioned starting the local homebuilding business that would become KB Home. It made the trip to Los Angeles, where it rested in my new office with a view of the Pacific Ocean at my retirement savings company, SunAmerica. Today, Edye’s gift sits on the pale wood desk where I oversee The Broad Foundations’ wide-ranging philanthropies. My office walls may be covered with art by Jasper Johns and photographs of the interesting people I have met during my career, but time and again—as it has so often over the years—my gaze goes to Edye’s paperweight and its inscription, a quote from George Bernard Shaw: “The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends upon the unreasonable man.”

You could say Edye and I got married because I was unreasonable. After a friend gave me Edye’s phone number, I called out of the blue and asked her to dinner. She had no idea who I was and couldn’t even remember my friend. She said yes only because her mother pressured her into it. I drove to her house one Saturday night and hoped that she wouldn’t slam the door after seeing my big ears and goofy grin. Lucky for me, she didn’t. Only a few dates later I proposed, promising her my vision of a great future: our own home, two kids, two cars, and maybe a vacation once a year to Florida.

Edye’s yes was my greatest piece of good fortune. Our marriage remains Exhibit A in my case for the value of being unreasonable. In love and in business, if you know what you want, you have to go for it.

Being Unreasonably Unreasonable

I didn’t stop being unreasonable once Edye and I were married. Sometimes it made me harder to live with than I needed to be. I hadn’t yet realized that there’s an art to being effectively unreasonable. One night, for example, when Edye wanted to see a movie, I drove to the theater only to turn right back around when I saw the long line. I wasn’t about to waste time standing around for tickets, even if, as Edye sensibly pointed out, there was no other way to see a movie.

A few months later, when we had barely settled into married life, I convinced her to sell our wedding china so that we could use the money to buy land. Edye was the only woman among her friends—maybe the only woman ever—who traded dishes for dirt.

Home wasn’t the only place I was unreasonable. I didn’t try too hard to hold on to my job at a small local accounting firm. I passed the CPA exam at age 20 on the first try—a test that took my boss and other higher-ups several tries to ace. As the youngest CPA in Michigan’s history, I started demanding a raise. My boss didn’t like that—or my refusal to drop the subject—and I was fired.

Asking your new boss for a raise because you did something he couldn’t do is an example of being artlessly unreasonable. It’s not a habit you want to cultivate because, frankly, it’s just another way of being willful or selfish. It won’t get you anywhere but into trouble.

After getting fired, I hung out the shingle of my own accounting firm. I found a rent-free office thanks to Edye’s cousin’s husband, Donald Kaufman, who let me share his. Don was a homebuilder who put up several houses a year and worked the rest of the time as a subcontractor on building sites. In exchange for the office, I told Don I would do his accounting.

Within several weeks of settling in, I was bored and restless. I had a few clients and I was teaching night courses in accounting at the Detroit Institute of Technology, but I still didn’t have enough work to keep me busy. I wanted more money and more excitement.

The problem was the only thing I knew how to do was accounting. I wasn’t interested in going into another line of work that required new credentials because I didn’t want to go back to school. I had pushed myself hard to graduate cum laude from Michigan State University in just three years. I tried to get a job working at a homebuilder but was turned away for lack of experience. That’s when I asked myself, “Why not start my own homebuilding company?”

I thought about my skills and my personality and whether they would be a good fit for the field. I read industry magazines that I got at the library. Meticulous research, as you will see, became a key to my success in all four of my careers. I studied other homebuilders, who struck me as too inefficient and not focused enough on the best available financing. They could build a house blindfolded, but they didn’t pay enough attention to their finances. A keen eye for numbers would be my competitive advantage.

I read and analyzed enough news to know that America in those years was moving from a nation of tenants to a country of homeowners. Building houses was not complicated, and I wasn’t going to have to build them anyway. I would just have to manage subcontractors and suppliers and find a partner who knew his way around the field—which is exactly what Don Kaufman was. That’s how we became Kaufman and Broad.

I told Edye my plans, and—instead of telling me I was nuts—she encouraged me to go for it. She also gave me the suggestion that made it all possible. She said to ask her dad, Morris, for start-up capital, $12,500. He said yes, and my first company was born.

Discovering the Art of Unreason

I heard complaints about how unreasonable I was as soon as I set foot on our first construction site. Some of my subcontractors owned shirts older than I was, and they weren’t too keen on listening to me explain how they could build homes faster and more cheaply if they would just stick to the budget and schedule I had drawn up. But by then I had carefully researched the cost of all the material we would need and the time it would take to complete every step in the building process.

That alone wasn’t enough to convince the contractors to work for us. Instead, I appealed to their interests. It was a little intimidating—I was a young kid asking seasoned contractors to work for less and wait a little longer to get paid. But they quickly saw my logic. If they stuck to my plan, our company would grow rapidly and they would have more work—even during the winter months, when building traditionally slows down. They took a chance with us, and the gamble paid off. We built 120 homes that first year. We made money—and so did our contractors.

Something similar happened three decades later, when I turned a small, rather sleepy insurance firm into the multibillion-dollar retirement savings company SunAmerica. Not long after the company spun off from Kaufman and Broad and became a separate publicly traded company in 1989, I walked into our conference room and told my senior executives that I wanted 20 percent growth every year. Again, there were murmurs from some of the more experienced hands that I was nuts.

But I had done my homework. Research—and using what you learn from it to analyze every situation—is what separates being unreasonable from being irrational. I knew we could achieve that high growth rate by acquiring smaller companies, building a broker network as big as Merrill Lynch’s, and being the best at marketing and addressing customer needs. I promised my employees great rewards if they joined me in reaching for that unreasonable goal. When we got down to work, we turned SunAmerica into a provider of secure retirements for millions of Americans—and the best performing stock on the New York Stock Exchange from 1990 until we merged with American International Group (AIG) in 1998.

The world of philanthropy is no less suspicious of unreasonable ideas and goals. I heard the usual complaints whenever I tried anything ambitious: helping to launch the Museum of Contemporary Art in 1979, raising the money to build Los Angeles’s acclaimed Walt Disney Concert Hall, working to transform K–12 urban school districts across America, and funding critical biomedical research with strategic investments in the style of a venture capitalist. All of those efforts succeeded, and I found that people who started out calling me crazy were suddenly happy to be my partners.

Victory, as the old saying goes, has many fathers. People will flock to support you when you do well, but in the crucial early moments, and whenever you try to create something out of nothing, you will be on a solitary path blocked by obstacles and doubt. If you’re already on that kind of course, this book will speak to you in a special way. It will give you examples from my experience that will help you enlist allies and collaborators. It will show you how to smooth your unreasonableness into an artful and focused drive. Being artfully unreasonable won’t necessarily make you a good team player, but it can make you a dramatically effective leader.

If, instead, you worry a lot about what other people think and you fear being called unreasonable, this book will show you that with research, good analysis, and focus you can have the confidence to do what others would dismiss as unreasonable and achieve the successes nobody thought you could reach.

The lessons I’ve taken to heart from nearly 60 years in business and philanthropy are ones I still use every day: ask a lot of questions, pursue the untried, revise expectations upward, take risks, be restless, and most important, seek out the best in your work—the best deal, the best investment, the best people, the best causes, the best art—and the best in yourself.