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The Art of Being Unreasonable: Lessons in Unconventional Thinking
Unorthodox success principles from a billionaire entrepreneur and philanthropist
Eli Broad's embrace of "unreasonable thinking" has helped him build two Fortune 500 companies, amass personal billions, and use his wealth to create a new approach to philanthropy. He has helped to fund scientific research institutes, K-12 education reform, and some of the world's greatest contemporary art museums. By contrast, "reasonable" people come up with all the reasons something new and different can't be done, because, after all, no one else has done it that way. This book shares the "unreasonable" principles—from negotiating to risk-taking, from investing to hiring—that have made Eli Broad such a success.
Broad helped to create the Frank Gehry-designed Walt Disney Concert Hall, the Museum of Contemporary Art, the Broad Contemporary Art Museum at the Los Angeles County Museum of Art, and The Broad, a new museum being built in downtown Los Angeles
His investing approach to philanthropy has led to the creation of scientific and medical research centers in the fields of genomic medicine and stem cell research
At his alma mater, Michigan State University, he endowed a full-time M.B.A. program, and he and his wife have funded a new contemporary art museum on campus to serve the broader region
Eli Broad is the founder of two Fortune 500 companies: KB Home and SunAmerica
If you're stuck doing what reasonable people do—and not getting anywhere—let Eli Broad show you how to be unreasonable, and see how far your next endeavor can go.
Eli Broad's embrace of "unreasonable thinking" has helped him build two Fortune 500 companies, amass personal billions, and use his wealth to create a new approach to philanthropy. He has helped to fund scientific research institutes, K-12 education reform, and some of the world's greatest contemporary art museums. By contrast, "reasonable" people come up with all the reasons something new and different can't be done, because, after all, no one else has done it that way. This book shares the "unreasonable" principles—from negotiating to risk-taking, from investing to hiring—that have made Eli Broad such a success.
Broad helped to create the Frank Gehry-designed Walt Disney Concert Hall, the Museum of Contemporary Art, the Broad Contemporary Art Museum at the Los Angeles County Museum of Art, and The Broad, a new museum being built in downtown Los Angeles
His investing approach to philanthropy has led to the creation of scientific and medical research centers in the fields of genomic medicine and stem cell research
At his alma mater, Michigan State University, he endowed a full-time M.B.A. program, and he and his wife have funded a new contemporary art museum on campus to serve the broader region
Eli Broad is the founder of two Fortune 500 companies: KB Home and SunAmerica
If you're stuck doing what reasonable people do—and not getting anywhere—let Eli Broad show you how to be unreasonable, and see how far your next endeavor can go.
256 pages, Hardcover
First published April 13, 2012
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Displaying 1 - 30 of 43 reviews
September 16, 2015
Before reading this book, I had never heard of Eli Broad. Now that I read the book, I wonder how I could ever have missed him! He four careers; accounting, homebuilding, retirement savings, and philanthropy. He is the first person to build two Fortune-500 companies, in completely different industries. He is now helping to reform public education, he has assembled world-class art collections and put them into publicly accessible museums, and he contributed $600 million to start a large biomedical research institution.
This book contains the advice of Eli Broad; lessons that can be applied to business as well as personal life. For example, he shows how unreasonable persistence can produce "big payoffs", although it is also important to "know when to quit". He advises the reader to forget conventional wisdom, because it strangles innovation. For example, his goal was to build single-family houses that were more affordable than any others on the market. So, he built houses without basements, which at the time was contrary to conventional wisdom. That, and other no-frills cost-savings allowed him to charge about 8% less than any other homebuilder. He describes many other innovations that made his business prosper.
Eli Broad shows how hard work and research can help the planning of any innovation. He shows how being first with an innovation is not necessary; being second can sometimes be preferable. He describes the value of delegating work to others. He describes how he hired the best people for the job, and how to keep them from leaving. He discusses the value of leverage--sometimes leverage is monetary, but at other times it is possible to leverage people, too. He has excellent advice for marketing and investing, and how to motivate people.
At the end of the book there is a long appendix. It lists the highlights of Eli Broad's career. It lists all of his business ventures, civic activities, educational activities, art activities, government and political activities, philanthropic activities, and honors. The list is 35 pages long!
In the very last paragraph of the book, Eli Broad mentions the most important decision of your life; to choose the right person to marry, and spend your life together. In my opinion, that is absolutely good advice.
I highly recommend this book. It is entertaining, engaging, and contains a wealth of excellent advice.
This book contains the advice of Eli Broad; lessons that can be applied to business as well as personal life. For example, he shows how unreasonable persistence can produce "big payoffs", although it is also important to "know when to quit". He advises the reader to forget conventional wisdom, because it strangles innovation. For example, his goal was to build single-family houses that were more affordable than any others on the market. So, he built houses without basements, which at the time was contrary to conventional wisdom. That, and other no-frills cost-savings allowed him to charge about 8% less than any other homebuilder. He describes many other innovations that made his business prosper.
Eli Broad shows how hard work and research can help the planning of any innovation. He shows how being first with an innovation is not necessary; being second can sometimes be preferable. He describes the value of delegating work to others. He describes how he hired the best people for the job, and how to keep them from leaving. He discusses the value of leverage--sometimes leverage is monetary, but at other times it is possible to leverage people, too. He has excellent advice for marketing and investing, and how to motivate people.
At the end of the book there is a long appendix. It lists the highlights of Eli Broad's career. It lists all of his business ventures, civic activities, educational activities, art activities, government and political activities, philanthropic activities, and honors. The list is 35 pages long!
In the very last paragraph of the book, Eli Broad mentions the most important decision of your life; to choose the right person to marry, and spend your life together. In my opinion, that is absolutely good advice.
I highly recommend this book. It is entertaining, engaging, and contains a wealth of excellent advice.
November 19, 2012
I got to about 50% when I realized that the book contains no more useful information. It's not a bad book, but it's a misleading one. While it is dressed as a sort of business oriented decision making adviser, it's actually a biography with sprinkles of simplistic, retrospective do's and don'ts.
If you're looking for a non-life changing, but an interesting and short-term inspirational life story, this is the exact effect I got from the book. At around 50% it stopped being inspirational and grew tedious, but up until that point it was a light, interesting read.
If you're looking for a non-life changing, but an interesting and short-term inspirational life story, this is the exact effect I got from the book. At around 50% it stopped being inspirational and grew tedious, but up until that point it was a light, interesting read.
November 27, 2019
Nice insight into Broads history and thinking and what factors he self attributes to his success. Great shuttle insight into the psychological universe of philanthropy and at the same time provides great and old ideas.
October 5, 2022
Eli had already built a Fortune 500 company from scratch, KB Home—and he would go on to build a second: SunAmerica
I am drawn to personalities different from my own, people who have a unique worldview and are accomplished in their varied fields.
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.
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.”
I passed the CPA exam at age 20 on the first try
In exchange for the office, I told Don I would do his accounting.
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.
She said to ask her dad, Morris, for start-up capital, $12,500. He said yes, and my first company was born.
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.
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.
Something similar happened three decades later, when I turned a small, rather sleepy insurance firm into the multibillion-dollar retirement savings company SunAmerica. I walked into our conference room and told my senior executives that I wanted 20 percent growth every year. 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.
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.
He also had us read what would become one of my favorite books, Beckoning Frontiers: Public and Personal Recollections, the memoirs of Marriner S. Eccles, who was President Franklin D. Roosevelt’s choice for chairman of the Federal Reserve Bank.
All I could see when I looked at the years ahead was more of the same, and that was not the future I wanted. As everyone else trimmed their expectations and ambitions to fit the nation’s prevailing pessimism, I ignored the conventional wisdom and came to the unreasonable conclusion that even recessions can yield opportunity.
From reading industry magazines, I already knew that homebuilders in Indianapolis, Indiana, and Dayton, Ohio, were building houses without basements and families were buying them. Basements had historically been the place to store coal to heat your home for the winter. New gas heating eliminated the need to stockpile coal, so basements weren’t a necessity. If we skipped building them, we could put up homes faster and sell them for less than our competitors. We also could price our houses for first-time buyers, who I figured wouldn’t move out of their apartments unless mortgage payments were less than their rent.
Everyone was throwing shovelfuls of the conventional wisdom at us: Nobody would buy a house without a basement, and even if they did, we would go broke trying to sell houses at such a low price.
strongest, stickiest—and most unexamined—kind of conventional wisdom. Often they’ve gone so long without scrutiny that they’re accepted as gospel. That’s what makes these core assumptions the best place to look for opportunities to innovate, no matter what business you’re in.
One of the things I quickly noticed was that, although our competitors called themselves homebuilders, they really thought they were in the real estate business. Obviously, a builder needs land, which you sell right along with the house. For homebuilders who saw themselves as being in real estate, it made sense to buy a lot of land and hold on to it, treating it as inventory to be drawn down as needed. But by holding on to inventory, you’re also tying up cash that could be put to work elsewhere.
So we changed the basics of our business. Instead of thinking of Kaufman and Broad as a real estate business, I decided we were manufacturers. We made and sold a product—a house. Back then, only the biggest homebuilders, like Bill Levitt, had the scale and capital to truly operate as manufacturers. But I studied their methods and figured out a way to do it at Kaufman and Broad despite our smaller size. We would treat land as just another raw material, like lumber or nails. We would buy it when we needed it and let someone else own it when we didn’t.
Once we saw ourselves as manufacturers, we also kept watch over every bit of material we used. This was not a typical practice among our competitors in Detroit. Our contractors were used to allowing a lot of materials to go to waste. Don and I would stalk our construction sites, pointing out every scrap and adjusting our orders until we knew pretty much down to the last bolt, brick, and two-by-four what it took to build a house.
Along with keeping costs low, we had to make sure our financing wasn’t expensive. We had to avoid taking out costly construction loans like most homebuilders did to cover building expenses. I realized we could pay contractors and suppliers from the money we received when the house was built and the sale closed. That meant we had to build a house within 45 days. Bills came due, depending on when we completed a house, between 31 and 60 days after the work was done. The money flow would average out without us having to draw on expensive borrowed cash.
My accounting background and my focus on the bottom line helped us continue to innovate financially. We developed a reputation among banks and investors for doing what no other homebuilder had ever done: gaining access to unsecured credit and eventually issuing our own commercial paper, both of which enabled us to reduce costs. We even launched our own mortgage company so customers could more easily arrange financing when they bought one of our houses. That venture was so successful that we started selling mortgages to other homebuilders’ customers.
We looked around, saw we had the capital and the organizational culture to play in a bigger league, and thought, “Why not?” We expanded first to Arizona and then to California, a market dominated by bigger and more experienced builders who knew how to maneuver within complex regulatory and political structures. To beat the big guys we knew we would have to come out of the starting gate with something new. Much like Midwestern houses without basements, no one thought row houses would work in the West. Everyone in Southern California wanted to live by the coast, but fewer and fewer could afford it. We designed smaller homes that shared one or two walls, making them less costly than stand-alone structures. We called them “townhouses.” Today they’re a staple of the housing market throughout Southern California.
I did make one rookie mistake. We should have sold 50 at one price and then raised prices. Step pricing might have slowed sales, but it would have been financially smarter. We could have covered any unexpected changes in our materials and labor costs while boosting our profits. Pricing can be a big tripping point for a new business, especially because it can seem as if the only way into a market is to slash the price and make it up in volume.
So while investors bid up Kaufman and Broad’s stock, we bought a small life insurance company to help stabilize earnings during downturns in the housing market.
Sun Life was an old-line insurance company based in Baltimore, Maryland, and when we bought it in 1971, it operated much the same way it did when it was founded in 1890. It had a history of modest growth, no better or worse than most other insurers. The company focused on the basics of the insurance business: taking in premiums, holding on to them, and making sure there was enough in the bank to pay claims. They kept their cash from premiums in traditional, low-return investments.
Our customers would be the same baby boomers who purchased Kaufman and Broad’s houses: a big generation of spenders who would live long past retirement age and, therefore, would be thinking more about retirement than death. That’s when I thought to introduce fixed and variable annuities—which actually were mutual funds in life insurance wrappers.
With variable annuities, we made money on fees while the policyholder decided how to invest and received the returns from and assumed the risks of their investment. With fixed annuities, we promised a particular rate of return while handling the investment and risk ourselves. We made our profit on the “spread”—the difference between what we ultimately paid out and what we could earn from investing the premiums.
We decided that instead of thinking like an insurer, we should think like a bank. What banks do is pretty simple: They buy money at one price, and sell it at another; that is, banks take in deposits and promise to pay you interest at a given rate. Then they loan money out at a higher rate, and the difference between your interest rate and the borrower’s is profit. I decided we would adopt a banking mentality at Sun Life. We promised a certain rate of return to our customers on their policies, and we would earn a higher rate of return from our investments.
We came up with ways to reimagine our businesses. A real estate company became a manufacturer and a life insurer became a bank. Both became Fortune 500 companies. That’s the value of unconventional insight.
If you spend all your time looking for shortcuts instead of doing what you have to do, you may never reach your goal.
I wanted something that would see us through the worst imaginable downturn, so I set our team to researching what sort of companies survived the Great Depression. Banks, of course, didn’t do well at all. Depositors drained them of liquidity and, at the time, no federal protections existed to keep them afloat. Mortgage companies, left with huge unpaid home loans when borrowers couldn’t afford payments, tanked. The companies that seemed to do the best were life insurers. We discovered that even in bad times, everyone who can afford to holds on to their life insurance to provide security for their family, meaning insurance companies kept getting business through the Depression. Those who couldn’t afford their premiums simply let their policies lapse. That meant the insurance company got to hold on to all the earlier payments but had no obligation to pay out on any future liability. Insurance companies could rest on their cash holdings, even if premiums declined and they had fewer customers on their books.
After we figured out that insurers survived the Depression relatively well, we started another exhaustive study: Which was the best insurance company to buy? I wanted one we could afford but with a long and solid reputation.
If you know history, you know the indicators of a downturn, whether it’s the 1970s or 2009: job creation slows, consumer confidence dips, businesses don’t know how to move toward growth, banks are cautious about lending, and the global financial markets tumble. That’s when you know it’s time to play defense.
As I came to realize, our company’s core competency wasn’t in building homes. It was in serving customers, particularly baby boomers. It was in meeting consumer needs at a price point that was advantageous to the buyer and profitable to us. We could do this in any industry. All we had to do was learn our new business from the inside out first—and there was no shortcut to that.
We were one of the earliest users of optical imaging technology, which allowed us to turn paper files into electronic ones. (This was another instance of daily research paying off—I first read about optical imaging in a newspaper.) We applied computer software that enabled our agents to hand customers their policies immediately, rather than waiting the customary week or 10 days.
In 1998 we merged the company with AIG for $18 billion. An investment of $10,000 in Kaufman and Broad when it went public in 1961, including the shares of SunAmerica received in the spin-off, would have been worth $34.1 million at the time of AIG’s purchase. In other words, over that 37-year period, we outperformed even Warren Buffett’s fabled Berkshire Hathaway.
You Can’t Do It All Yourself, So Ask Questions and Delegate
When I told Alan I knew nothing about campaigns, he just said, “You’re smart. You’ll figure it out.”
Some CEOs think they can get away with that because they’re at the top. Perhaps being underprepared is their way of showing how important they are. In fact, the boss should be the best informed person in the room and should have the good sense to ask questions when necessary. Even in the thick of things it’s important to keep asking questions—and you won’t be able to ask the right ones if you haven’t done your homework. That’s how you turn experience, yours or others’, into an education.
something like following the first hiker on a trail. The guy in front has to break through the brush, get scratched up, and lose his way a few times before making it to the top. The second guy can just charge along the path the first guy has marked, avoiding the rough patches where he stumbled.
The first mover does have some advantages that may be hard to match: technological knowhow, access to resources and talent, early market dominance, and name recognition. Each of these, however, can be acquired by a smart second mover.
I am drawn to personalities different from my own, people who have a unique worldview and are accomplished in their varied fields.
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.
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.”
I passed the CPA exam at age 20 on the first try
In exchange for the office, I told Don I would do his accounting.
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.
She said to ask her dad, Morris, for start-up capital, $12,500. He said yes, and my first company was born.
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.
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.
Something similar happened three decades later, when I turned a small, rather sleepy insurance firm into the multibillion-dollar retirement savings company SunAmerica. I walked into our conference room and told my senior executives that I wanted 20 percent growth every year. 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.
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.
He also had us read what would become one of my favorite books, Beckoning Frontiers: Public and Personal Recollections, the memoirs of Marriner S. Eccles, who was President Franklin D. Roosevelt’s choice for chairman of the Federal Reserve Bank.
All I could see when I looked at the years ahead was more of the same, and that was not the future I wanted. As everyone else trimmed their expectations and ambitions to fit the nation’s prevailing pessimism, I ignored the conventional wisdom and came to the unreasonable conclusion that even recessions can yield opportunity.
From reading industry magazines, I already knew that homebuilders in Indianapolis, Indiana, and Dayton, Ohio, were building houses without basements and families were buying them. Basements had historically been the place to store coal to heat your home for the winter. New gas heating eliminated the need to stockpile coal, so basements weren’t a necessity. If we skipped building them, we could put up homes faster and sell them for less than our competitors. We also could price our houses for first-time buyers, who I figured wouldn’t move out of their apartments unless mortgage payments were less than their rent.
Everyone was throwing shovelfuls of the conventional wisdom at us: Nobody would buy a house without a basement, and even if they did, we would go broke trying to sell houses at such a low price.
strongest, stickiest—and most unexamined—kind of conventional wisdom. Often they’ve gone so long without scrutiny that they’re accepted as gospel. That’s what makes these core assumptions the best place to look for opportunities to innovate, no matter what business you’re in.
One of the things I quickly noticed was that, although our competitors called themselves homebuilders, they really thought they were in the real estate business. Obviously, a builder needs land, which you sell right along with the house. For homebuilders who saw themselves as being in real estate, it made sense to buy a lot of land and hold on to it, treating it as inventory to be drawn down as needed. But by holding on to inventory, you’re also tying up cash that could be put to work elsewhere.
So we changed the basics of our business. Instead of thinking of Kaufman and Broad as a real estate business, I decided we were manufacturers. We made and sold a product—a house. Back then, only the biggest homebuilders, like Bill Levitt, had the scale and capital to truly operate as manufacturers. But I studied their methods and figured out a way to do it at Kaufman and Broad despite our smaller size. We would treat land as just another raw material, like lumber or nails. We would buy it when we needed it and let someone else own it when we didn’t.
Once we saw ourselves as manufacturers, we also kept watch over every bit of material we used. This was not a typical practice among our competitors in Detroit. Our contractors were used to allowing a lot of materials to go to waste. Don and I would stalk our construction sites, pointing out every scrap and adjusting our orders until we knew pretty much down to the last bolt, brick, and two-by-four what it took to build a house.
Along with keeping costs low, we had to make sure our financing wasn’t expensive. We had to avoid taking out costly construction loans like most homebuilders did to cover building expenses. I realized we could pay contractors and suppliers from the money we received when the house was built and the sale closed. That meant we had to build a house within 45 days. Bills came due, depending on when we completed a house, between 31 and 60 days after the work was done. The money flow would average out without us having to draw on expensive borrowed cash.
My accounting background and my focus on the bottom line helped us continue to innovate financially. We developed a reputation among banks and investors for doing what no other homebuilder had ever done: gaining access to unsecured credit and eventually issuing our own commercial paper, both of which enabled us to reduce costs. We even launched our own mortgage company so customers could more easily arrange financing when they bought one of our houses. That venture was so successful that we started selling mortgages to other homebuilders’ customers.
We looked around, saw we had the capital and the organizational culture to play in a bigger league, and thought, “Why not?” We expanded first to Arizona and then to California, a market dominated by bigger and more experienced builders who knew how to maneuver within complex regulatory and political structures. To beat the big guys we knew we would have to come out of the starting gate with something new. Much like Midwestern houses without basements, no one thought row houses would work in the West. Everyone in Southern California wanted to live by the coast, but fewer and fewer could afford it. We designed smaller homes that shared one or two walls, making them less costly than stand-alone structures. We called them “townhouses.” Today they’re a staple of the housing market throughout Southern California.
I did make one rookie mistake. We should have sold 50 at one price and then raised prices. Step pricing might have slowed sales, but it would have been financially smarter. We could have covered any unexpected changes in our materials and labor costs while boosting our profits. Pricing can be a big tripping point for a new business, especially because it can seem as if the only way into a market is to slash the price and make it up in volume.
So while investors bid up Kaufman and Broad’s stock, we bought a small life insurance company to help stabilize earnings during downturns in the housing market.
Sun Life was an old-line insurance company based in Baltimore, Maryland, and when we bought it in 1971, it operated much the same way it did when it was founded in 1890. It had a history of modest growth, no better or worse than most other insurers. The company focused on the basics of the insurance business: taking in premiums, holding on to them, and making sure there was enough in the bank to pay claims. They kept their cash from premiums in traditional, low-return investments.
Our customers would be the same baby boomers who purchased Kaufman and Broad’s houses: a big generation of spenders who would live long past retirement age and, therefore, would be thinking more about retirement than death. That’s when I thought to introduce fixed and variable annuities—which actually were mutual funds in life insurance wrappers.
With variable annuities, we made money on fees while the policyholder decided how to invest and received the returns from and assumed the risks of their investment. With fixed annuities, we promised a particular rate of return while handling the investment and risk ourselves. We made our profit on the “spread”—the difference between what we ultimately paid out and what we could earn from investing the premiums.
We decided that instead of thinking like an insurer, we should think like a bank. What banks do is pretty simple: They buy money at one price, and sell it at another; that is, banks take in deposits and promise to pay you interest at a given rate. Then they loan money out at a higher rate, and the difference between your interest rate and the borrower’s is profit. I decided we would adopt a banking mentality at Sun Life. We promised a certain rate of return to our customers on their policies, and we would earn a higher rate of return from our investments.
We came up with ways to reimagine our businesses. A real estate company became a manufacturer and a life insurer became a bank. Both became Fortune 500 companies. That’s the value of unconventional insight.
If you spend all your time looking for shortcuts instead of doing what you have to do, you may never reach your goal.
I wanted something that would see us through the worst imaginable downturn, so I set our team to researching what sort of companies survived the Great Depression. Banks, of course, didn’t do well at all. Depositors drained them of liquidity and, at the time, no federal protections existed to keep them afloat. Mortgage companies, left with huge unpaid home loans when borrowers couldn’t afford payments, tanked. The companies that seemed to do the best were life insurers. We discovered that even in bad times, everyone who can afford to holds on to their life insurance to provide security for their family, meaning insurance companies kept getting business through the Depression. Those who couldn’t afford their premiums simply let their policies lapse. That meant the insurance company got to hold on to all the earlier payments but had no obligation to pay out on any future liability. Insurance companies could rest on their cash holdings, even if premiums declined and they had fewer customers on their books.
After we figured out that insurers survived the Depression relatively well, we started another exhaustive study: Which was the best insurance company to buy? I wanted one we could afford but with a long and solid reputation.
If you know history, you know the indicators of a downturn, whether it’s the 1970s or 2009: job creation slows, consumer confidence dips, businesses don’t know how to move toward growth, banks are cautious about lending, and the global financial markets tumble. That’s when you know it’s time to play defense.
As I came to realize, our company’s core competency wasn’t in building homes. It was in serving customers, particularly baby boomers. It was in meeting consumer needs at a price point that was advantageous to the buyer and profitable to us. We could do this in any industry. All we had to do was learn our new business from the inside out first—and there was no shortcut to that.
We were one of the earliest users of optical imaging technology, which allowed us to turn paper files into electronic ones. (This was another instance of daily research paying off—I first read about optical imaging in a newspaper.) We applied computer software that enabled our agents to hand customers their policies immediately, rather than waiting the customary week or 10 days.
In 1998 we merged the company with AIG for $18 billion. An investment of $10,000 in Kaufman and Broad when it went public in 1961, including the shares of SunAmerica received in the spin-off, would have been worth $34.1 million at the time of AIG’s purchase. In other words, over that 37-year period, we outperformed even Warren Buffett’s fabled Berkshire Hathaway.
You Can’t Do It All Yourself, So Ask Questions and Delegate
When I told Alan I knew nothing about campaigns, he just said, “You’re smart. You’ll figure it out.”
Some CEOs think they can get away with that because they’re at the top. Perhaps being underprepared is their way of showing how important they are. In fact, the boss should be the best informed person in the room and should have the good sense to ask questions when necessary. Even in the thick of things it’s important to keep asking questions—and you won’t be able to ask the right ones if you haven’t done your homework. That’s how you turn experience, yours or others’, into an education.
something like following the first hiker on a trail. The guy in front has to break through the brush, get scratched up, and lose his way a few times before making it to the top. The second guy can just charge along the path the first guy has marked, avoiding the rough patches where he stumbled.
The first mover does have some advantages that may be hard to match: technological knowhow, access to resources and talent, early market dominance, and name recognition. Each of these, however, can be acquired by a smart second mover.
March 9, 2013
"Who you spend your life with-much more so than how you choose to spend it-is the most important decision you can make. Do it right. That's the best advice I can give you." ~ Eli Broadi
Currently the 189th richest person in the world according to Forbes.
In his book he shares how he became a billionaire and the lessons of success and failure.
The title of the book, "The Art of Being Unreasonable" comes from a quote his wife gave him for his desk from 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 on the unreasonable man." To Eli "unreasonable" means to "think unconventionally". He likes to prove people wrong who say "that it can't be done." He usually finds a way that things can be done by thinking unconventionally.
There are also many lessons on philanthropy in this book that we would be wise to follow.
Currently the 189th richest person in the world according to Forbes.
In his book he shares how he became a billionaire and the lessons of success and failure.
The title of the book, "The Art of Being Unreasonable" comes from a quote his wife gave him for his desk from 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 on the unreasonable man." To Eli "unreasonable" means to "think unconventionally". He likes to prove people wrong who say "that it can't be done." He usually finds a way that things can be done by thinking unconventionally.
There are also many lessons on philanthropy in this book that we would be wise to follow.
July 26, 2012
I don't usually like books like this and now with all the hullabaloo about MOCHA it seems he may be the 800 pound gorilla. I also think he made tons of really ugly houses -- but, hey, people gotta live somewhere. Everyone can't live in a built to last turn of the century home. And maybe that's why he's so obsessed with art and architecture today.
That being said, I downloaded this for my husband and wound up reading the whole thing myself. He still hasn't even read it. And he's a charming storyteller and a very entertaining guy. I couldn't stop turning the pages. Now, I don't remember almost anything I read, but at the time I really felt like I was learning. Money well spent.
That being said, I downloaded this for my husband and wound up reading the whole thing myself. He still hasn't even read it. And he's a charming storyteller and a very entertaining guy. I couldn't stop turning the pages. Now, I don't remember almost anything I read, but at the time I really felt like I was learning. Money well spent.
December 26, 2012
Full disclosure: this book was written by Broad with my friend Swati Pandey, so I'm hardly a neutral observer.
That said, I found the book an enjoyable and well-constructed story of Broad's varied career. This type of book is not normally one I read, but Broad has done work in a lot of different areas and he and Swati do a good job of organizing what he has learned into some key life lessons.
That said, I found the book an enjoyable and well-constructed story of Broad's varied career. This type of book is not normally one I read, but Broad has done work in a lot of different areas and he and Swati do a good job of organizing what he has learned into some key life lessons.
June 24, 2019
Terrible book...egotistical without providing much useful knowledge
August 21, 2018
Here’s the scenario: Exactly one decade into a successful, industry-transforming journey as a housebuilder of the future – in the booming housing market of the U.S. in the 1960s – the company suddenly decides to acquire a sleepy, family-owned life insurer, using up a considerable chunk of the balance sheet. Motive? To diversify ahead of a “looming housing market correction”. All in favour of buying/holding onto the stock, please raise your hand! Well, you should have. The housebuilder was KB Homes and the life insurer was SunLife. The transaction was made with impeccable timing by the founder Eli Broad, leading to a 25 per cent share price CAGR over 37 years, handily beating Berkshire Hathaway over the time period. In 1998 the renamed SunAmerica was acquired by AIG for $18bn, whereas KB Homes is still traded, slowly recouping from the latest housing correction. The Art of Being Unreasonable is the leadership and life lessons of Eli Broad, the only entrepreneur to have founded two Fortune 500 companies in two different sectors. As accomplished as that is, it could have been even better – more on that later.
Whereas the perfect 20/20 vision of hindsight, delivered in a brilliant to-the-point format of a book, might make the answer to the question seem obvious (of course I would have backed him, he was a genius!), the here and now is always infinitely more difficult. And that’s the beauty of the success of The Outsiders, William Thorndike’s masterpiece; waved around today as a blueprint for capital allocation prowess and corporate stewardship, at different points in time all eight CEOs portrayed in the book have been considered to be utterly insane, with share-prices lingering at Graham-type valuations. KB Homes and Eli Broad, while not one of the eight Outsiders, were no exception. Unconventionality is not offered up alongside low volatility and steadily quarterly progress!
The structure of the book is loosely aligned with Mr. Broad’s reasons for success occupying the first half of the book, with chapters such as “Forget Conventional Wisdom” and “The Value of Being Second”. They are all well researched, applicable and wonderfully prosed. I enjoyed this part of the book as much as Morton Mandel’s It’s All About Who and Jack Welch’s Straight From The Gut. The latter half of the book takes it into more detail and also mixes business lessons with Broad’s considerable accomplishments in philanthropy and art collection. This is where the plot gets a little thin in my opinion, at least for the business- minded reader. But, the book-title conveys more than a figurative reference to “art”; it is actually covered almost with the same detail and gusto as his other three “careers”. Although neatly interwoven with business and life, it is a subject matter somewhat narrower in scope to copy-and- learn from. As a reader, you can choose to breeze through these pages. But dinner would be a poorer meal without enjoying dessert.
Getting back to the “it could have been even better”-comment. Hidden in a paragraph towards the end, Mr. Broad talks about an investment KB Homes made in 1966, founding Nation Wide Cablevision, one of the earliest entrants into this field. Receiving a bid for the business in 1972 from TCI, KB Homes – strapped for cash from heavy investing into home building, cable and insurance – decided to sell. After bemoaning the fact that the $23mn could have been worth much more today, merely from holding onto TCI stock, but perhaps even more so by consolidating the industry themselves, Mr. Broad merely drops the subject. As an avid student of business leaders and entrepreneurship, I wished he spent more pages on how capital allocations were made, the importance (or not) of a “corporate DNA” and how this experience affected the AIG takeover of SunAmerica. Inasmuch as I enjoyed a full-length book on his career and massive accomplishments (the CV runs 11 pages), the spirit Mr Broad shares with the other Outsiders would have made for fascinating reading under Thorndike’s tutelage.
Whereas the perfect 20/20 vision of hindsight, delivered in a brilliant to-the-point format of a book, might make the answer to the question seem obvious (of course I would have backed him, he was a genius!), the here and now is always infinitely more difficult. And that’s the beauty of the success of The Outsiders, William Thorndike’s masterpiece; waved around today as a blueprint for capital allocation prowess and corporate stewardship, at different points in time all eight CEOs portrayed in the book have been considered to be utterly insane, with share-prices lingering at Graham-type valuations. KB Homes and Eli Broad, while not one of the eight Outsiders, were no exception. Unconventionality is not offered up alongside low volatility and steadily quarterly progress!
The structure of the book is loosely aligned with Mr. Broad’s reasons for success occupying the first half of the book, with chapters such as “Forget Conventional Wisdom” and “The Value of Being Second”. They are all well researched, applicable and wonderfully prosed. I enjoyed this part of the book as much as Morton Mandel’s It’s All About Who and Jack Welch’s Straight From The Gut. The latter half of the book takes it into more detail and also mixes business lessons with Broad’s considerable accomplishments in philanthropy and art collection. This is where the plot gets a little thin in my opinion, at least for the business- minded reader. But, the book-title conveys more than a figurative reference to “art”; it is actually covered almost with the same detail and gusto as his other three “careers”. Although neatly interwoven with business and life, it is a subject matter somewhat narrower in scope to copy-and- learn from. As a reader, you can choose to breeze through these pages. But dinner would be a poorer meal without enjoying dessert.
Getting back to the “it could have been even better”-comment. Hidden in a paragraph towards the end, Mr. Broad talks about an investment KB Homes made in 1966, founding Nation Wide Cablevision, one of the earliest entrants into this field. Receiving a bid for the business in 1972 from TCI, KB Homes – strapped for cash from heavy investing into home building, cable and insurance – decided to sell. After bemoaning the fact that the $23mn could have been worth much more today, merely from holding onto TCI stock, but perhaps even more so by consolidating the industry themselves, Mr. Broad merely drops the subject. As an avid student of business leaders and entrepreneurship, I wished he spent more pages on how capital allocations were made, the importance (or not) of a “corporate DNA” and how this experience affected the AIG takeover of SunAmerica. Inasmuch as I enjoyed a full-length book on his career and massive accomplishments (the CV runs 11 pages), the spirit Mr Broad shares with the other Outsiders would have made for fascinating reading under Thorndike’s tutelage.
September 8, 2021
Wonderful read. Though it's kind of a rags to riches story, I love the simple style where he talks about successes and failures. The book is not too long, but he has been able to condense his ideas so lucidly, that you can't really skim through it.
His ability to being unreasonable is based on his homework. I love the way he simplified and distilled a complex topic like Negotiation within just 6 pages. He has done the same for other areas too, particularly in building a team and working with people. I didn't agree with all his ideas, especially about the chapter on competition, but was able to see merit in it.
I would have liked to see more on e-commerce and internet based businesses, though of course, the world is far different today than when the book was written.
I'd recommend this book to anyone who is graduating from college or management institutes or any budding entrepreneur.
His ability to being unreasonable is based on his homework. I love the way he simplified and distilled a complex topic like Negotiation within just 6 pages. He has done the same for other areas too, particularly in building a team and working with people. I didn't agree with all his ideas, especially about the chapter on competition, but was able to see merit in it.
I would have liked to see more on e-commerce and internet based businesses, though of course, the world is far different today than when the book was written.
I'd recommend this book to anyone who is graduating from college or management institutes or any budding entrepreneur.
June 17, 2023
Creating two Fortune 500 companies in a lifetime is not an easy task! Eli Broad has been a person devoted to his principles, and hence, no wonder, one who has rubbed many hearts, too. But, early on he established his measuring scale of achievement and stuck to it. In this book, he shares what, in hindsight, he thinks he did right, whether others agree or not, and what he considers as his failures. With a keen bent on improving the society, and putting his money where his mind is, he comes out as a no non-sense man who means business. Reading his book will point out stuff in your own life's work which you wish you had done better, and why you couldn't! Eli demands and gets the best out of everyone, even if it is with a heartburn quite often. But, in the process, he makes others see how really far can they themselves reach. A must read for entrepreneurs, managers, businessmen and investors. I rate this book five on five star!
January 23, 2020
A very pleasant surprise. His philosophy of being "artfully unreasonable" is very inspiring for any entrepreneur looking to establish their own successful business. One intriguing insight was that the life insurance/retirement annuities sector is one of the few industries that was relatively unscathed by the great depression hence his decision to invest in SunAmerica to hedge against the business cycle. It's worth keeping in mind if one is looking to invest defensively so as to preserve wealth for the long term.
He also apparently has a fantastic marriage which has lasted over six decades. Makes a strong case for marriage in this era of marital disenchantment and celebrity divorces.
He also apparently has a fantastic marriage which has lasted over six decades. Makes a strong case for marriage in this era of marital disenchantment and celebrity divorces.
June 4, 2020
Mostly boring. I wanted to like it but I just couldn't get into. There are a few tidbits of wisdom but nothing that you could really practice. It's mostly an autobiography detailing everything he did to succeed. It jumped all over the place. It didn't have anything I could say to myself, "Oh, I should totally do that" or "hey, that's a great idea, I'm going to try that." Other than accepting that it's okay to be unreasonable at times I didn't really get much more out of it. There are much better books out there that are more worth your time.
January 26, 2023
A few pearls of wisdom from Eli Broad:
1.Unless you have the time, talent, and disposition, focus on hiring a professional investment advisor instead of researching individual investments yourself.
2.Corporate lawyers who serve as deal makers on behalf of their clients could make for great executives in your company - examples, Bruce Karsh and Jay Wintrob.
3.Do not neglect your children in favor of work.
4.Art collections are meant to be shared, not stored.
1.Unless you have the time, talent, and disposition, focus on hiring a professional investment advisor instead of researching individual investments yourself.
2.Corporate lawyers who serve as deal makers on behalf of their clients could make for great executives in your company - examples, Bruce Karsh and Jay Wintrob.
3.Do not neglect your children in favor of work.
4.Art collections are meant to be shared, not stored.
January 24, 2019
Audiobook said narrated by Eli Broad but he just read a prologue. The rest of the audiobook was narrated by a boring generic voice that made it difficult to connect with the content. Disappointing.
A few takeaways but a bit lackluster. The book doesnt capture the enormity of what Eli Broad really achieved.
A few takeaways but a bit lackluster. The book doesnt capture the enormity of what Eli Broad really achieved.
May 12, 2019
a light read and slightly inspirational but nothing that really stands out or sticks with me as very striking or life changing
I really enjoyed where he talked about collecting art but he does not go into much detail about it or details about his business
by the end it felt like he kind of just gave an overview of all the things he had done and a few principles he holds
I really enjoyed where he talked about collecting art but he does not go into much detail about it or details about his business
by the end it felt like he kind of just gave an overview of all the things he had done and a few principles he holds
November 16, 2019
Usually I don’t write reviews but this book was a waste of time. I finished it anyways because I cannot not finish reading a book once I start it - I need to work on that.
Book is a self loathing book about a billionaire and how he is trying to make the world a better place....save your time and don’t read it.
Book is a self loathing book about a billionaire and how he is trying to make the world a better place....save your time and don’t read it.
January 20, 2018
Excellent, candid and succinct treatise on commonsensical business principles. I gleaned this book recommendation from Mohnish Pabrai's talk at Google and wasn't disappointed. Tried the audiobook and the narration wasn't for me - much easier to read in print.
January 10, 2021
Autobiography of KB Homes founder, who started the business in his early 20s. Big art collector and philanthropist. Provided some practical insight from his career which can be applied to others. Regrets section was interesting for a multibillionaire.
December 16, 2019
The Art of Being Unreasonable is a book chock-full of practical advice from someone who has been dramatically successful. It’s a book you’ll read through and return to several times.
See my full review at
https://www.threestarleadership.com/b...
See my full review at
https://www.threestarleadership.com/b...
January 13, 2020
Straight forward nose to the grindstone stuff
July 3, 2020
Very impressive investment and philanthropic track record... Did not like the style so much
July 12, 2021
Easy to read bio by billionaire entrepreneur.
Think outside the box. He was successful, but I can see why some thought him a jerk, and felt a bit bad for his family.
Think outside the box. He was successful, but I can see why some thought him a jerk, and felt a bit bad for his family.
May 26, 2023
No me gustó el libro.
February 7, 2024
not the most interesting biography to read, mostly just boasting about his success (which is very impressive) but nevertheless the lessons can be learned is few
March 4, 2017
Eli is a legend. I really connected with this story. I so enjoy hearing entrepreneurs stories
August 8, 2016
Overall I liked it. It's not just an educational book. It reads more to me like an autobiography with lessons peppered in. For me, that sums up most autobiographies. He's got a clear friendly writing style and isn't afraid to criticize himself or others as long as it comes with a lesson.
Basically, this guy is one of the great businessmen/philanthropers of the 20th century. He built Fortune 500 companies and ran them into major success. He also spearheaded the effort that built Disney Concert Hall, the Broad Museum and many other philanthropic projects.
Basically, this guy is one of the great businessmen/philanthropers of the 20th century. He built Fortune 500 companies and ran them into major success. He also spearheaded the effort that built Disney Concert Hall, the Broad Museum and many other philanthropic projects.
November 13, 2012
I've always admired Mr. Broad for his passion for art and his generous want to share with the community. It's always enjoyable and informative to read about the journey successful people take in life. My goal is not to be a billionaire, but I guess it doesn't suck! The book gives Broad's mantra - never give up, if it's something you believe in.
February 5, 2013
Great to hear more insight from my mentor and business school founder at Michigan State Business School! Very thoughtfully laid out book with wisdoms on many areas of life and business. Quick and easy read for all ages. Amazing what success in this world can allow you to do both for the economy and as a philanthropic leader. He is a true version of a life well lived!
September 25, 2012
A very quick read on Eli Broad, a man who amassed massive amounts of money and then power. But, the book never gives up any specific detail on how he really accomplished it. The book reads more like a pat on the back for being a good business man and doing things his way.
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