2. Embrace Risk

—Ralph Olson (Pepsi, E-Z-Go Golf Carts, Gibson Greeting Cards, and R.A. Jones)

Ralph Olson only knows one direction—moving forward—no matter what obstacle or risk might stand in his way. He grew up having to face the world head on growing up in gang-ridden, downtown Philadelphia. Still, he was determined to succeed in the face of risk, so he went head to head with his parents and even his football coach, Joe Paterno. Later, in the business world he faced the challenges of Harvard elites, Fortune 100 companies, and his wife's cancer diagnosis—head on. His determination earned him an amazing career and may have even saved a life.

Early in his business career, Ralph observed that not everyone took to risk as well as he did, especially the "bluebloods" with Harvard pedigrees. "I was raised with adversity at every step," Ralph says. "So when adversity would come to call, the bluebloods had difficulty dealing with it, but I could respond to it in a calmer, more realistic, objective way. My approach was, if you don't want it, then I'll take it."

In the business world, adversity comes in the form of difficult projects, the ones that no one wants because the projects are likely to fail—and that can be a career breaker. No one wants to be in charge of a project that fails. But Ralph was willing to take the risk of any sizably challenging project; in fact, he seemed to thrive on it. He figured it was his edge, and he used it to outshine those with more elite Ivy League pedigrees. The first remarkable project that launched Ralph's career was the challenge of the world's first 2-liter plastic bottle. I'll refer to it as the "plastic bottle project."

Back when he was a financial analyst at Pepsi Cola, Ralph was offered a project that others turned down: bring to market a plastic soft drink container that would be attractive to consumers and cost-effective to manufacture. "They were looking for somebody to grab hold of the technical side of the process and make business sense out of the whole thing," Ralph says. "I saw it as a tremendous opportunity. Yeah, I could do this. My thinking was 'I want it because I think I can make it work.'" He did make it work, and now the 2-liter plastic bottle is part of our culture; people even make bird feeders out of the things. It's hard to imagine this was considered a risk, but that's Ralph's point: Most problems are surmountable, if only we can find the courage to face them.

"When you are challenged with a risky situation," Ralph says, "go forward and close the door behind you." Don't leave yourself a way to back out of the situation. On every project Ralph tackled, he did just that—he closed the door behind him. And the first door he had to close was with his parents and their attitude toward his college education.

Starting from Scratch

There once was a time when children were expected to literally pay back their parents for raising them: half of their paychecks for the first 5 years of work would go back to their parents. Ralph's parents, who were first- and second-generation Americans, expected this of him, just as their parents had expected it. So when Ralph told his parents he was going to college first, he was taking the risk of going against tradition and enduring their anger. Still, Ralph stood firm and said he would go to college—on his own dime—and then pay them back a certain amount based on what they thought he would earn those first 5 years after college. In his working-class Philadelphia neighborhood in the 1950s, his parents didn't come off sounding as unreasonable as they do now.

So Ralph rebelled and went to college at Penn State because he had a chance to walk on to its Division I football program. This was another risk because neighboring Villanova University (with a less prestigious D-I program) was offering him a guaranteed full scholarship. Luckily, Ralph performed well at his Penn State tryouts and earned a spot on the team, as well as a full ride for tuition, room, and board. In addition to football, he had to work whatever part-time job he could find to pay for extras such as clothing. He'd defied his parents, so going back to mom and dad for help was not an option.

Enter Joe Paterno, the legendary Penn State football coach, who showed Ralph the importance of teamwork and showed him he could push himself to achieve more than he ever thought he could. One day, Paterno had Ralph over to his house for a home-cooked meal and told him to start thinking about his career because he wasn't going to the pros and may actually play less in his senior year than he did as a freshman. Ralph argued and protested—at first—but then realized Paterno's judgment was right. That's when he threw himself into his engineering studies and started thinking of a business career. His goal: to wear a white shirt.

Ralph's career goal came from an experience he had as a 12-year-old, when he started caddying at a country club. "I saw a whole world that I'd never seen before," recalls Ralph, whose father was a factory worker. "I had no idea what these people did for a living, but I wanted to be one of them." And, he noticed, they all wore white shirts, while his father and all the neighborhood men wore blue shirts to work. Ralph was going to have a white-collar job.

Graduating with a mechanical engineering degree from Penn State, Ralph took a job offer from Crown Cork & Seal, which manufactured beverage containers for the soft drink industry. Immediately, he saw that an advanced degree was necessary; engineering salaries tended to have a ceiling that was reached after only a few years. At first he considered a master's degree in engineering but then realized that ultimately he would be better off long-term to study business and management—he wanted to be a vice president by age 40 and president by age 50. So he enrolled in an MBA program in night school at the University of Pennsylvania's Wharton School of Business. It was a hectic period, with Ralph working by day and studying at night.

First, he had to pay back his parents—and luckily they had underestimated his starting salary, so he was able to pay them back in fewer than 5 years. Then, because he had little time for socializing, Ralph started spending weekends at the ski slopes, where he combined work and fun as a ski instructor. That was also where he met Ginny, one of the few female ski instructors, who would later become his wife. When his MBA was finished, Ralph started looking to open some more doors.

Underestimating Obstacles

Around graduation time, recruiter companies came in to make their hires from the graduating class at Wharton. Pepsi was on the recruiting list, and someone made the comment that Ralph shouldn't even expect to be interviewed because he was a night-school student. But Ralph, who was used to that kind of ribbing, took the risk of rejection and signed up for an interview anyway. During the interview, he was asked what kind of starting salary he wanted, and Ralph named a figure that he thought was good. Later, when Pepsi's job offer came, Ralph was amazed that the salary was $5,000 more than he'd asked for. He and Ginny were puzzled over this. When he asked Pepsi about it, he was told the higher salary was because they expected Crown, his current employer, to counter. Ralph had a lot to learn about compensation and the business world, and there would be more lessons to come.

Another challenge came from the class of new hires he was working with at Pepsi; they all had Ivy League pedigrees, and introductions always included mentions of where they had gone to school. "Hi, I'm Bill—Harvard. This is Jack—Yale, and Sue from Dartmouth." Ralph, with his undergrad degree from Penn State and MBA from Warton's night-school program, was teased about his background. "This is Ralph. He went to some large agricultural school in Pennsylvania and Wharton for his MBA, but it was the night-school program." Ralph says, "I had to have the confidence to say 'I'm going to neutralize their advantage by working harder, being more determined, not giving up.'" So he came up with his lifelong strategy of being willing to take risks that others wouldn't. Where others saw obstacles, Ralph saw opportunity.

That attitude got him promoted at Pepsi from engineering manager to financial analyst—and he was "fast tracked." Instead of resting on his achievements, he took the major risk of his career so far and tackled the "plastic bottle" problem. Brainstorming with a plastics company's engineering think tank, Ralph saw that the main obstacle was that the engineers weren't thinking about what was economically feasible; they wanted to design spherical bottles that would be a nightmare to stock on shelves. After crunching numbers from Pepsi's marketing department, Ralph urged the engineers to come up with a large conventional-looking container; it would be easier to stock, and the bigger size would boost consumption to offset manufacturing costs. And he also did something daring: He proposed—and got—a 5-year exclusive contract with the plastics company for whatever container they ended up agreeing on. So Pepsi ended up with 5 years of exclusive rights to the 2-liter plastic bottle, which gave the company a huge competitive advantage.

Ralph didn't just solve the bottle problem, he was put in charge of the whole plastic bottle distribution division at age 30. That was when he was given a mentor, Warren Junker, an older executive who was putting off retirement. Junker poured all his time into Ralph, even accompanying him to meetings, and gave him play-by-play analyses of his performance and suggestions about how to improve. It was an amazing experience, which shows the huge importance of finding a mentor.

Junker had sage advice and taught Ralph time management, strategy, and the science of compensation. Ralph learned to reduce chitchat on telephone calls and think through all the possible outcomes before getting into negotiations. Ralph also protested that he made less money than some of the people he supervised. Junker's advice: "Responsibility and action come before monetary rewards. Don't worry, the company will see your good work, and you will be compensated soon enough." After 2 years taking Junker's advice, Ralph was voted in as vice president at age 32, making him the youngest vice president in the company's history at the time. He was making great money, but Ralph wanted to go further. Soon Ralph started to get itchy to move up again, this time to the Frito Lay division of PepsiCo, and that's when he listened to Junker's second piece of advice regarding compensation: "If your employer doesn't reward your accomplishments, a competitor will." And that's when Ralph decided to start taking risks with compensation.

Building Momentum—Adventurously

In the early 1980s, Ralph resigned from Pepsi: "They were flabbergasted." He left the comfort of Pepsi—and his spot in the executive gym—to be vice president of operations at a major paint manufacturer's packaging division. It was part of the sweeping changes at the venerable paint company, which was badly in need of fresh ideas. The way Ralph saw it, this risk was a huge opportunity.

"If you're not president in 3 years," the CEO told him, "I hired the wrong person." The title of division president was something Ralph wanted more than ever, so he set out to improve things. Each year for 3 years he won the company's operational award of the year, a $100,000 prize. Then he stunned executives by giving away half to the people who worked for him—something that was unheard of at the company then. "I said, 'We did this as a team. These people work for me. I owe it to them,'" says Ralph, who raised a few eyebrows. But, as always, Ralph risked disapproval and did what made sense to him. The following year, he won again. As the CEO handed him the check, he asked, "Are you giving half this check away?" But by now Ralph didn't have to justify himself. The third year he got the award again; and after dinner at a posh Phoenix resort, the CEO asked Ralph to take a walk with him around the golf course.

The CEO said, "I'm disappointed. You're not president, and it's been 3 years. Maybe I hired the wrong guy. Why haven't you asked for your boss's job?" Ralph answered that it was the CEO's job to propose the promotion. As they walked the entire 18 holes, the CEO quizzed him on what he would do as president of operations. Ralph could have deferred or squirmed out of the conversation, but he faced the risk and poured out his ideas. By the 18th hole, he'd been officially offered the job of division president; but his boss wouldn't talk about compensation yet. "When I said, 'I need to think about that,' he countered, 'Do you want the job or don't you?'" Ralph recalls. That was Friday night; by Monday morning he'd accepted the job and decided on a 50 percent salary increase, stock options, and another $50,000 bonus if he would be able to double the price of his multimillion-dollar operational division and sell it off. This was a substantial pay raise and a nice guaranteed pay package but taught him a hard lesson. Ralph would come to regret that big salary and small bonus.

On the bright side, there were plenty of pluses. Ralph learned key management techniques, such as the difference between a good manager and a good leader. "A manager tells people what to do, then measures how well they do it," he says. "A good leader instills thinking processes so a person can take initiative and solve problems without you being there." Ralph wanted to be a good leader.

To fulfill his vision, Ralph used an extensive network of very intelligent people, including Ram Charan, the renowned business guru. In a memorable all-night session at the Chicago Hilton, Ralph and Charan went over his strategic plan to turn around his division at the paint company. It was a grueling session fueled by coffee and Pepsi delivered by a wide-eyed room service waiter, who peered in at the room littered with flip-charts and papers taped to the walls.

After that, Ralph set out to make drastic improvements. Part of the problem was that aerosols, a huge part of the company's business, had been discontinued when fluorocarbons were banned. So he let go of 30 percent of the company's employees, which was the hardest part for Ralph. "But in this situation, it was a case of business survival," he says. "If the business failed, no one would have a job."

When the paint company was later sold, Ralph saw his glaring mistake. The value of the business was $28 million when he started, and it sold for $50 million 5 years later. "After I turned it around and added more than 20 million dollars in value, I only got $50,000." Ralph says. "I told myself, 'If this ever happens again, I'll do it differently.'"

Taking the Next Leap

Ralph spent the next few years in a series of business turnarounds—in companies that made various products, from golf carts to greeting cards. He took on troubled companies that many executives didn't want to touch; it was exhilarating and demanding. And it challenged his ethics; for instance, once he was offered a zero-interest home mortgage if he would send all of the employees of his business to use the same local bank. Ralph chose the ethical decision and refused, not wanting to "owe" anyone anything. Then he found a great company in need of serious turnaround work: R.A. Jones, a packaging industry leader.

While the packaging company had a lot going for it, Ralph decided, the big problem was management. When customers asked for innovative new packaging, management would turn them down and send them to the competitor. By now, Ralph was well acquainted with executives who feared risks, and he was just the person to take them on. But it was a touchy situation because the company was family owned, and the person calling the shots was a family member. Still, Ralph took the risk and fired the late founder's descendant, a 35-year company veteran who'd been groomed to be CEO. That person retained his board seat, however, and came to appreciate Ralph's business acumen.

By taking on the innovative projects, the packaging company prospered, and so did Ralph. He spent 12 years at the company, taking it through two sales. And because he'd learned his lesson about compensation, he took a lower salary and instead asked for a percentage of the sale price. That strategic thinking and risk taking doubled Ralph's net worth.

Just as Ralph transitioned out of his last year at R.A. Jones, his family was faced with devastating news. His wife Ginny, the mother of his two children and his partner since giving ski lessons back in Pennsylvania, was diagnosed with breast cancer. Ralph tackled it just like he faced every big challenge. First, he thought only about the goal: how his wife could beat this cancer. Second, he assembled a team of physicians who were the best in the field to get his wife through this time. And he didn't let fear rule his decisions. For example, when the first surgeon said they needed to operate within days, Ralph quickly pulled every string he could to get a second opinion from a surgeon renowned in the field.

When something like a cancer diagnosis comes into our lives, it can be devastating to our sense of security. It's tempting to give up and let the doctors handle everything. But Ralph and his wife stayed involved, researching the latest treatments and most skilled surgeons.

His attitude was, "Let's find a way to make this better," Ralph recalls. "I didn't ever feel there was any option but success." Just as he had done all his life, Ralph closed the door on the possibility of failure and focused on the solution. Ralph and his wife did everything possible to ensure she overcame the disease—and she did. More than 2 years later, Ginny is cancer free and healthier than ever!

Ralph's way of overcoming adversity is thrilling because he's full of real-world examples of how important it is to own your career and see risks as opportunities. He's the ultimate illustration of how we can have the best of both worlds, with financial rewards that we normally associate with entrepreneurs who start and sell their own companies. Ralph didn't take the risk of starting his own company, but he took the route of an "entrepreneur undercover," fixing existing companies and then cashing out for his employer. Even if we don't all become turnaround experts, we can all take reasonable risks and embrace the hard-to-solve problems. The bigger rewards, after all, come when we take the bigger risks.