The Adversity Paradox: An Unconventional Guide to Achieving Uncommon Business Success - Hardcover

Chapter One

 

What Is Business Savvy, Anyway?

 

Business savvy is not something you're born with, nor is it something you inherit. But as we believe it is the key to business success, we start with the end in mind, defining what it is.

 

Everyone you'll meet in The Adversity Paradox possesses phenomenal business savvy, and the spark that first set it off was a firsthand encounter in overcoming some sort of adversity. But what exactly is business savvy? The above definitions spell it out, but more simply, you might call it "business sense" or "business instinct," and you might say that those who possess it are "business smart" or just plain "successful." But we like "business savvy" because it neatly describes both the people who possess it and the acquired competencies they gain by befriending adversity. So before we talk about the adversity paradox, we're going to devote some time to examining business savvy in detail. This discussion will be the foundation for all that follows: a close look at how a wide variety of people overcame adversity and achieved great success, and how the lessons they learned from their experiences can help you do the same.

 

So how much business savvy would you say you have? Enough to purchase an insolvent company with a dozen employees and grow it to a $100 million business, and pen some of the bestselling business books of all time? Enough to, despite having no business background whatsoever, start a business in your basement that goes on to become a household name, with sales of more than $700 million? Do you have enough business savvy to arrive in a new country with very little money, do whatever it takes to put yourself through school, and within a handful of years rise from an entry-level position to the top spot in the company? How about the kind of business savvy that takes you from an early life marked by poverty, a broken home, struggles with learning, and the lowest of expectations all the way to the executive suite? Or the kind of business savvy that enables you to carry an aviation company through the storm after 9/11, or the kind that makes it possible to pick yourself up after the sudden separation from a decades-long career and emerge with an even stronger and more fulfilling purpose? No matter what type of adversity life throws at you, do you have the wherewithal to resist giving up and to pursue your passion-driven goals all the way to their successful completion?

 

Maybe not yet, but this book will introduce you to those who've acquired the insight the adversity paradox has to teach: Working to overcome humble beginnings, lack of knowledge, major unexpected setbacks, or any manner of misfortune that life throws your way may be the greatest tool for building business savvy you'll ever possess. The business leaders you'll meet in The Adversity Paradox have overcome all manner of adversity and used their experiences to create the business savvy that enabled them to attain unmatched levels of success. In short, they've found a way to befriend adversity and put it to work for them. They've turned failure on its head and have built successful careers and personal lives upon the very experiences most people work assiduously to avoid.

 

Here's the thing about adversity: If you can make it your friend, you may find yourself in one of the most powerful and transformative situations that life has to offer. Of course we'd never advocate going out and seeking difficult circumstances in order to develop yourself or further your career, but the fact is setbacks are going to happen—certainly in the business world. An investment can go bad. An important employee or partner could desert you. A counted-on sale may go to your biggest competitor. An important deal could go upside down on you. But it's in how one deals with these unexpected misfortunes that separates those who fail from those who attain the top levels of success.

 

Perhaps it's a sad fact, but success absolutely does not provide the impetus for improvement that adversity does. Say you just sold a new client, won a promotion or a pay raise, or gave a presentation that drew rave reviews. What's the result? High fives around the office, a pat on the back at home, or a toast over dinner. Sure, you should enjoy the well-deserved accolades, but be wary: In the face of success we can become complacent. It's far too easy to become too satisfied with our current performance and get a little lax on improving.

 

In contrast, what happens after a failure or some personal heartache? Ideally we immediately analyze the situation to see what went wrong and we focus on what we could've done differently. No one likes to go through adversity, but faced with the right attitude, a difficult setback can be one of our most powerful catalysts for change. Adversity can provide the motivation and the determination to sharpen our skills and regain our focus, and that in turn has a direct positive impact on the creation of business savvy.

 

If there's one thing we'd like you to take away from this book, it's the certainty that you always have a choice. No matter how terrible the setback—and in this book you'll meet some people who overcame "impossible" situations—you can make the choice to lie back and let adversity consume you, or you can face the situation head-on and work to make adversity your friend. Befriending adversity means not shying from it, but learning from it. It means not letting it defeat you, but laboring to overcome it, and even better, using what you learn from the experience to improve yourself. Those who've been tested by the fires of adversity and have passed the test emerge stronger, smarter, and savvier.

 

Oddly enough, though the stories in this book are quite diverse, the attributes evinced by these business-savvy individuals are remarkably similar. That's because they've made certain core competencies—ones that consistently get superior results—part of their daily practice. Pause for a moment and think of the most successful business people you know. We'll bet they comprehend things quickly and are able to synthesize vast amounts of data and drill down to the salient points. They're naturally intuitive and can size up situations and people virtually on the spot through their ability to empathize with others' positions. They're resourceful and innovative in matters both practical and abstract, even visionary. They're knowledgeable and perceptive, and if they discover an information void, they act quickly to fill it. They act promptly but judiciously on information, and they exhibit wisdom and sound reasoning in matters large and small.

 

But for people with business savvy borne of adversity, there is so much more to the story. The business leaders who've benefited from the adversity paradox are the ones who use the diagnostic skill of introspection to conduct honest self-assessments so as to make trajectory adjustments whenever necessary. They're the employees with outstanding personal values—values they never check at the company door. They're the ones with a superior work character, who often arrive at the office before everyone else and leave later—and love it. For them a job is never just the five days standing in the way of the weekend or the means to an easy retirement. These folks have found a purpose they're passionate about and have found a way to take the work out of work. They're the employees who nurture a thirst for knowledge that keeps them constantly abreast of the ever-changing world of business.

 

Given such commendable core competencies and practices, it isn't surprising that those who've learned their lessons the hard way often go on to achieve enormous wealth as a result of their prodigious business savvy. Who comes to mind when you think of incredibly successful businesspeople? Richard Branson, Warren Buffett, Bill Gates, Wayne Huizenga, Oprah Winfrey? They're all good answers, and in fact every one of them has been listed in Forbes's March 2008 issue on billionaires. Winfrey's experiences of adversity are the best known: A female minority from an underprivileged background, she has become one of the country's most successful and admired businesspeople, with assets now reaching $2.5 billion. Like Winfrey, you can bet that every one of these business-savvy individuals has encountered adversity, overcome it, and used what they learned to maximize their business savvy. Adversity doesn't defeat them but propels them to succeed.

 

Now, it's true that most of us will never achieve the level of success and fame that Oprah Winfrey and Warren Buffett have, but the good news about the adversity paradox is that anyone—yes, anyone—can learn how overcoming his or her own personal misfortunes can improve business savvy. This book is for the rest of us—the young worker with his foot on the bottom rung of the corporate ladder, the small business owner, the midlevel manager, or even the CEO who's interested in raising his overall performance.

 

So let's meet a man whose life is an example par excellence of the adversity paradox in action. Like yours, his may not be a household name, but the kind of success he's achieved, both in business and in his personal life, is something to which we all aspire. Like many in America, he was an immigrant with many strikes against him. But like a select few, he overcame the adversities life dealt him and built his success upon the very misfortunes that stop most in their tracks.

 

John Pappajohn

 

John Pappajohn was born in Greece and immigrated with his mother to the United States while he was still an infant. Mother and son settled in Mason City, Iowa, where Pappajohn's father had gone a year earlier to open a small neighborhood grocery store. Pappajohn's family spoke Greek exclusively at home, and as learning English proved to be difficult, his kindergarten teacher held him back a year so he could catch up with his peers. What he did not find difficult was work. At the age of eight he was a rag merchant and a junk collector. He scavenged for rags, brass, copper, and lead and sold scrap to the local junk dealer.

 

When he was a little older, he joined his father in working at the grocery store. Then when he was sixteen, tragedy struck: His father died, leaving Pappajohn to manage the store. He was now the head of the household, left to support two younger brothers and a mother who spoke no English. His father's death and the sudden responsibility that fell to Pappajohn were difficult, to say the least, but the experience he gained by living through those adversities created a firm basis for the development of the business savvy that would later make him so successful. "You become successful by solving your problems and overcoming adversity," he said. "The grocery store was hard work, but it was a wonderful learning experience. It also kept our family afloat. We had one financial pot and all the earnings from the store went to support the family."

 

Money was tight, but the Pappajohns believed wholeheartedly in the power of education, so John and his brothers took turns putting each other through college. After graduating with a degree in business administration, he again worked at the family grocery store, but also went into insurance. Eventually he relocated to Des Moines and became the original organizer of Guardsman Insurance. "My experience at the grocery store assisted me greatly in the organization of Guardsman," Pappajohn said. "I knew about customer service, delivering a superior product, sticking with it through tough times, and as I was the oldest of three boys in a family without a father, I learned very quickly that you do what you have to do. I'd also gained outstanding business judgment, which is an asset in running any business."

 

While Pappajohn found success in insurance, he didn't develop a true passion for it. So he researched new opportunities, and for the first time read about venture capital. "It looked like the perfect opportunity for me," he said. "So I made a commitment to myself, to my family, and to my friends that I was going to be a venture capitalist and from that point forward, I could not back down." In 1969 he founded Equity Dynamics, a venture capital firm.

 

Pappajohn has been enormously successful in venture capitalism, and he is now committed to helping others find the same kind of success. The John and Mary Pappajohn Entrepreneurial Centers have helped create and launch more than a thousand new companies. "I'm now in the unusual position that I can finance big dreams for people with big ideas," he said. "That's what it's all about—helping other people succeed."

 

Pappajohn's early experiences with adversity—the death of his father, the onset of serious family and work responsibilities at a young age, limited financial resources—have remained with him throughout his adult life and career. But while some would find even one of these challenges sufficient reason to give up or to lower their goals, Pappajohn credits these very things as crucial ingredients in his success. At the grocery store he learned all aspects of the business and how to make decisions on his own. He gained a certain level of maturity much earlier than most. He also learned that he wanted to go into business for himself, which was the foundational step in what has proved to be an extraordinary career. Today, he goes to great lengths to make educational and business opportunities available to those who need assistance. His career and his life illustrate the adversity paradox in action.

 

Let's now take a closer look at his business savvy in action. We'd like to show you how Pappajohn's early experiences with adversity played out in his career many years later, and how what he learned by overcoming adversity contributed directly to his business savvy.

 

Pappajohn the Venture Capitalist

 

Pappajohn describes his job as "financing, advising, raising capital, and market consulting." He has served as a director of more than forty public companies and has been involved in more than fifty public financings. "I'm often seen as a company doctor," he said. Unlike a doctor, he makes an initial financial investment, stays actively involved with his patients through adolescence, and gets paid only if his patients turn into superstars. In short, he supplies business savvy to small start-up companies, helps grow them, and not only sees entrepreneurs' dreams realized but lots of millionaires made in the process. And, of course, he makes a buck or two for himself. After years of successful ventures, Pappajohn is a very wealthy man, and one of the wonderful things about him is that he enjoys giving money away even more than he enjoys making it.

 

At any one time he could be personally invested in and working closely with as many as twenty companies—a roster of pertinent information he keeps track of with handwritten notes he carries in his pocket. He's always keeping score, and over the thirty-eight years Equity Dynamics has been in business it has averaged a 50 percent annual re...