Am I Being Too Subtle?: Straight Talk From a Business Rebel

by Sam Zell

In real estate I’m known as the Grave Dancer. That was the title of an article I wrote back in 1976, and the nickname stuck. Some might see buying and creating value from others’ mistakes as a form of exploitation, but I see it as giving neglected or devalued assets, in any industry, new life. And often in my career I’ve been the only bidder for them—the last chance for a resurrection. I’m not claiming to be altruistic—just optimistic, and confident that I can turn those assets around.

entrepreneur. Someone who doesn’t just see the problems but also sees the solutions—the opportunities.

run my company as a meritocracy with a moral compass. And for those who raise their eyebrows at that statement—who think you can’t get to the top unless you beat the crap out of everybody—you’re wrong. When you’re a repeat player, when your world is your business and your business is your world, it’s all about long-term relationships. In any negotiation I believe in leaving a little bit on the table. And in any relationship I believe in sharing the stakes. I’ve been doing deals with many of the same people for decades because the goal is for us to all come out ahead. And many of my employees have been with me for twenty or thirty years or more because if I do well, they do well. These

What I want to do is use my gifts to find opportunities no one else sees, solve problems others can’t, do great deals, turn around broken assets, and grow great companies. In short, I want to make a difference. I don’t mean that in a pious way. I’m talking about progress—shaking up the status quo, moving the needle, building something meaningful.

People often ask me, “When are you going to retire?” And I answer, “Retire from what?” I’ve never worked a day in my life. Everything I’ve done has been because I’ve loved doing it, because it was enthralling. I thrive on inspiring and challenging people, giving them new opportunities and watching them grow, and I take enormous pride in their accomplishments.

It was a lesson in the value of how much you learn by seeing people in their own environments. Today I could probably get just about anybody to come to my office for a meeting, but that wouldn’t tell me much. Instead, I spend over a thousand hours a year on my plane traveling around the world to meet with people. I want to see what they are like on their home court, how they treat their people and the examples they set. •

While I was unaware of it at the time, my real compensation for that job wasn’t monetary. It was learning about and getting comfortable with rejection. And as I would later realize, indifference to rejection is a fundamental part of being an entrepreneur.

Redundancies are much more predictable and transparent than theoretical opportunities to add value. My focus is always on the downside. Overly optimistic assumptions lead to the graveyard of corporate acquisitions.

The experience was shocking. I realized then the danger of boards that were beset by cronyism and inertia—as if an appointment to a board was a perk, a retirement benefit or a no-strings gift to golfing buddies. My philosophy on board composition and culture is the antithesis of what I saw on the Santa Fe board. As the chairman of public companies, I’ve always selected board members based on the assumption that they were cheap consultants to the business, not potted plants. I’ve never hesitated to use them—or to have management teams use them—to further the objectives of the company. Also, board materials are prepared with all relevant information prior to meetings. Board members are expected to read the materials in advance, and the real purpose of the meetings is to generate robust discussion. Our board meetings are often raucous, with frequent interruptions, questions, and commentary. As a result, our companies have always benefited from the combined wisdom of our directors.

My first priority was cash. I couldn’t jeopardize what we had built by selling in desperation, but I couldn’t keep going without cash. I didn’t know it then, but this phase in my career was the genesis of a mantra I would repeat regularly for decades to come: Liquidity equals value.

Today, instead of expressway frontage, apartments are measured by their “walk scores”—how many steps to public transportation, to the grocery store, to Starbucks, to the gym. Go deeper and you can see the changes from the deferral of marriage across industries. The shift in priorities, lifestyle, and discretionary income that began in the 1990s was a harbinger for a new era of consumerism. Real estate isn’t just about buildings as inanimate objects. It often reflects the pulse of the nation.

I got a lot of criticism for the way I tried to change Tribune—for the approach I used, as well as for the substance of the changes themselves. I know I used harsh language; I know my rhetoric was inflammatory. Most of it was deliberate. I wanted to ignite passion in the employees—to shake them out of the status quo, make them realize that they had to change, and help them do it. I didn’t think I had all the answers. But it became increasingly obvious that without a serious wake-up call, Tribune—like all newspaper companies—would not succeed. The more stubborn the writers, editors, and executives got, the more agitated I became. It often seemed like they just didn’t get it. Maybe I was too rough. But I wasn’t wrong about where the business needed to go.

To me, everything is connected. I believe that globalization provides more opportunity than threat. The days when demand was created only within our own borders are over. Today, you can draw lines between demand for apartments in the U.S. and world trade flows, international currencies, and perspectives of stability in other countries. I don’t think we’ve even begun to understand the various ways that interconnection and interdependency will evolve over the next couple of decades. Being global, if not in business then in mind-set, isn’t really a choice, in my opinion. It’s a mandate, a responsibility, and a thrill. So, in the late 1990s, I turned my business interests to the international markets in earnest with the creation of another private investment firm, Equity International.

Entrepreneurs are driven. We are constantly putting a stake out in front of ourselves. What’s the motivation? Well, I doubt that many company founders who reach billion-dollar valuations are motivated solely, or even primarily, by money. To be sure, making a lot of money is a carrot. But I would venture that most great entrepreneurs simply love what they do—whether it’s problem-solving, building something from the ground up, or a passion for their product or service. And great entrepreneurs are always great salespeople.

When I negotiate, I spend a lot of time thinking about the person across the table, their motivation and priorities. I work to understand which issues are the deal breakers for them—which three of the twenty things we’re discussing they really care about. And of course I’m crystal clear on the ones that are most important to me. That way we can both get what we want. It’s a win-win—the best kind of deal.