The Adversity Paradox: An Unconventional Guide to Achieving Uncommon Business Success
272
The Adversity Paradox: An Unconventional Guide to Achieving Uncommon Business Success
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Overview
Business people like Pete Dawkins, Harvey Mackay, Doris Christopher, and Walter Scott Jr. know that the answer to this question lies in firsthand knowledge of "The Adversity Paradox": working to overcome humble beginnings, lack of knowledge, unexpected setbacks, or any manner of misfortune can be the foundational step in a path to incredible achievement.
While many motivational business books promise easy access to prosperity and power by way of secret insight, quick and easy steps, or "insider tips" that are dubious at best, this book tells it straight. It offers candid accounts from those who have been tested by adversity and illustrates how they have put their misfortunes to good use by gaining business savvy from them.
The paths to success are diverse, but The Adversity Paradox identifies patterns that anyone can study and learn from.
Product Details
| ISBN-13: | 9780312598792 |
|---|---|
| Publisher: | St. Martin's Publishing Group |
| Publication date: | 06/08/2010 |
| Pages: | 272 |
| Product dimensions: | 5.74(w) x 8.44(h) x 0.72(d) |
About the Author
Bob Jennings is president of Lean Management Group, a consulting company focused on senior management methods and execution.
Read an Excerpt
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 return. At the time we interviewed Pappajohn, he had a sixteen-year track record in excess of 100 percent. Many of his ventures have been in the health-care industry and involve the supply of goods, services, and new technologies. It's an industry he has come to understand extremely well. Because of his vast institutional knowledge and experience, his estimation of what he can help grow and prosper and what he cannot assist is spot-on. Given his industry reputation, he's often approached with deals, and looks at more than a hundred opportunities a year. He selects only those that meet his investment criteria.
We knew John Pappajohn personally and by reputation, and we knew of his prodigious business savvy and that his life exemplified the adversity paradox in action. But we wanted to gain an even better understanding of how he actually applies his hard-earned business savvy and how he makes a living doing so. So we asked one of his former presidents to take us through an insider's view of how Pappajohn accomplishes a deal. Doug Stickney is the cofounder and former CEO of one of Pappajohn's ventures turned superstar, Quantum Health Resources Inc. Pappajohn and Stickney first became acquainted in 1985 when Stickney was employed at his father's start-up business, Western Medical Specialties (WMS). Between its start in 1979 and 1983 the company had grown profitably to $1 million in sales. In late 1983 Stickney began working for his father, and by 1985 the business grew to $10 million in sales but needed money and expertise in order to maintain its rapid growth. To find both, Stickney's father turned to John Pappajohn.
Pappajohn agreed to help in exchange for the opportunity to buy a stake in the company, up to 10 percent. Pappajohn envisioned easily growing the business to a point where they could go public. Then two weeks after striking the deal, a large healthcare services company came knocking on the door with a $10 million offer to buy WMS outright. With Pappajohn's blessing, Stickney's dad accepted the offer. This would have been a quick windfall for Pappajohn, but he refused his 10 percent stake, saying that he had done nothing to deserve the money. It was immediately obvious to both father and son that Pappajohn was a man of integrity, a man who would be a respectful and honorable partner in business.
Doug Stickney continued to work for WMS. After another ownership change he decided to go out on his own. He wanted to create a network of pharmacies around the country that would cater specifically to unique home health markets. Stickney was thirty-two at the time, had some industry experience, and was well educated, with a bachelor's degree from Davidson College and a master's in biostatistics from UCLA. What he lacked was the money to get the business off the ground. Remembering the positive experience his father had had with Pappajohn and the impression of confidence and trust Pappajohn had engendered, Stickney gave him a call. "I knew I had the right guy in Doug Stickney," Pappajohn later said, smiling. "He had grown his dad out of business."
Pappajohn also had invaluable insight for Stickney. Having been involved in a number of health-care start-ups he knew "the space," as he calls it, very well, and with health-care costs going through the roof, he recognized a future of less in-patient care and more in-home care. He could also see that the business infrastructure needed to service in-home health care had yet to be created, and like many of his ventures this was an opportunity to be one of the first providers into the space. With many years of business experience, Pappajohn knew exactly what needed to be accomplished and believed that they could help build a successful public health-care company.
Within three weeks of their first phone conversation, Pappajohn wired Stickney $200,000, and in 1988 Quantum Health Resources Inc. was founded. The premise of the business was to set up pharmacies that, unlike the traditional street-corner Walgreens, had a focus of cost-effective delivery of high-quality therapies and services to individuals affected by chronic conditions such as hemophilia, α1 antitrypsin deficiency, HIV/AIDS, autoimmune disorders, growth hormone deficiencies, cystic fibrosis, primary pulmonary hypertension, and Lou Gehrig's disease. Stickney would serve as president and CEO while Pappajohn would mentor and play a role as a key board member.
One of the first things he recommended to Stickney was that all votes by the board needed to be unanimous—there could never be questionable direction for the young company. "And Pappajohn made sure of that," Stickney said. "He had incredible listening skills. He'd collect all the information he could before taking a position, and then he had the ability to counsel other board members, some more experienced than he in various areas, and gain the unanimous votes necessary to act."
Stickney, along with three other executives he'd brought in as cofounders, worked for the first six months strictly for sweat equity. They invested all they had, $180,000, but things moved quickly. By the end of 1988 they had a dozen paid employees, and by early 1989 Stickney and Pappajohn decided to visit Wall Street to get a feel for the viability of and investor interest in eventually taking the company public. Once again Pappajohn acted as an invaluable mentor. It was Stickney's first foray on Wall Street, while Pappajohn had a reputation for pounding the pavement in New York City, scheduling as many investor calls as could be fitted into a day (and then some) and then running from meeting to meeting at a feverish pace. Their first day Pappajohn scheduled five presentations in which Stickney did the talking and Pappajohn remained silent. In hindsight, Stickney realized that these were what Pappajohn would deem second-tier prospects: Pappajohn was preparing Stickney for the big leagues.
Between 1988 and 1991 Quantum grew from zero to $100 million in sales and expanded to seven pharmacies. In those first three years the business would require $10 million of added investment to cover start-up losses and provide working capital, primarily for inventory. There were three rounds of fund-raising and with each new round the company needed to negotiate a new valuation, which Stickney agonized over continually. The shares of stock given to new investors diluted the founders' and initial investors' ownership in the company. Valuing stock in each new issue is a difficult task, as the owners are selling what they believe is opportunity, as opposed to historical earnings. If they value the stock too low, they hurt themselves, while valuing too high risks unhappy investors. Stickney turned to Pappajohn for advice. "Always remember," Pappajohn said, "pigs get fat and hogs get slaughtered." The reasonable valuations Stickney subsequently agreed to not only got investors in, but each and every investor returned for every round. By negotiating reasonable valuations, Stickney ensured no investors were disappointed with the outcome and results, and in the end all who made initial investments or invested with sweat equity—who worked for stock rather than a paycheck—were very well rewarded.
Stickney, Pappajohn, and the board decided to take Quantum public in April 1991. Then, just a few months before the offering, an employee approached Stickney with a $50,000 tax problem and a request for a loan. The employee was Stickney's brother. Faced with the touchy dilemma, Stickney again sought advice from Pappajohn. His response was stern but sound: "Every decision you make you must imagine that it will be public and will be in our prospectus for our public stock offering," he said. "Now, what do you think potential investors will think when they read you loaned a family member money?" Then Pappajohn sought out Stickney's brother and set up a meeting. Pappajohn personally provided him a loan, which was kept off of the company's balance sheet and was later repaid.
The public offering was a resounding success, and the three-year-old Quantum Health Resources achieved a valuation of $150 million. It operated for five years as a public company before being acquired. At its peak, Quantum had a market valuation of more than $800 million and 1,500 employees. Pappajohn's $200,000 investment had a value of more than $40 million and at the same time created over a dozen employee millionaires, including Stickney. Stickney states today, "Everyone involved knew Pappajohn made a big hit on the deal, and we couldn't have been any happier for him."
The Business-Savvy Profile
An examination of John Pappajohn's road to success reveals an impressive roster of business-savvy competencies—as will examinations of all the people you'll meet later in this book. Though Pappajohn is an entrepreneur, these business-savvy competencies can be found in any profession, including the one you're in. Let's take a look at them, and as you read, ask yourself if you possess them and, if so, how proficient you are in each area. Plenty of people are good, but the business savvy are great—consistently great.
Systems and Linear Thinking
One reason John Pappajohn has done so well is that he is able to see and understand thoroughly his area of business as a whole. For Pappajohn this is the health-care industry, but clearly the ability to discern and understand the big picture is essential for whatever area of business you're in. In Pappajohn's case, he reads widely and talks to people constantly, so he knows what direction the industry is going and why, any trends or new technologies that may affect the market, and any voids that may be present, which allows him to anticipate emerging needs ahead of others. He also keeps an eye on the state of the economy, inflation, the competition, and consumer demand, just as anyone wishing to do well in business must. In the 1980s he realized that there would be a growing demand for home health care to combat rising medical costs, and he was able to position himself to fill that need. More recently, he perceived a pressing need for noninvasive methods to diagnose cancer, and he invested in companies designing these devices. At the same time, Pappajohn is always on the lookout for small companies that have the ability to fill the needs he has identified. Simply stated, he has gained a comprehensive view of the health-care industry that allows him to see where all the pieces of the puzzle may fit.
The kind of global thinking we're talking about is known as systems thinking. In his seminal book, The Fifth Discipline, Peter Senge describes systems thinking as the "discipline for seeing the wholes." It's "a framework," he writes, "for seeing interrelationships rather than things, for seeing patterns of change rather than static snapshots."
But it doesn't stop there for the truly business savvy. Business savvy professionals need to see and understand not only the sum of all the parts, but also the parts themselves. The kind of thinking required to do this is the opposite of systems thinking, or linear thinking. As its name implies, linear thinking involves following a straight path. Much of the work done in any business is execution and involves linear thinking. It's a mind-set of closing the world out so as to concentrate exclusively on the execution of the task at hand in order to complete it as quickly and efficiently as possible. The best practice in business has always been to try to define jobs and processes in a linear arrangement in order to lower the cost of production of goods or services. A variety of means have been used for developing the best linear arrangements, including theory of constraints, Six Sigma, lean manufacturing, and business process management.
When Pappajohn got involved with Quantum, the business was at its most rudimentary stage: There were four founders, no payroll, and, at best, the beginnings of a business plan. There were countless individual steps involved in taking it from nothing to a $40 million success—incorporation, cash flow, filling key positions, marketing plans, site selections, contracting, structuring and restructuring, investors, company boards, growing from a four-person team to one of 1,500. The list goes on and on. At every step and with every detail, he was involved in growing the business, either hands-on or in a coaching role. If there was a lack of attention to pertinent details along the way, the fledgling company could have sputtered and died.
Business-savvy people not only need to be adept at both systems and linear thinking, but also must have a feel for when to employ systems thinking and when to go linear to get results. The business savvy can bounce back and forth between the two mind-sets quickly and easily. When they're in the linear mindset and they run into obstacles or setbacks, they're able to step back, put on the systems thinking hat, and rethink the system. After the big picture has been adequately reassessed and a new plan or path of action determined, their linear thinking comes immediately into play to get results, quickly and efficiently.
Continuous Thinking
It's often said that business leaders like Pappajohn are visionary, and while we wouldn't hesitate to describe him as such, there are very good explanations as to why business-savvy people such as Pappajohn can "see into the future." We've described one reason already: Pappajohn's systems thinking ability enables him to see the health-care industry as a whole, which allows him to anticipate needs in the market before anyone else does. But yet another explanation lies in another type of thinking the business savvy have mastered: continuous thinking.
On one level continuous thinking is just what its name implies. The business savvy's minds never turn off. They're constantly running what-if scenarios in their heads and assessing the general risks and rewards for potential outcomes. The practice of continuous thinking can often fuel audacious dreams and goals: If the mind is constantly churning, inspiration is more likely to strike. If Pappajohn and his team realize their vision with noninvasive cancer diagnostic devices, for example, it will do no less than revolutionize the health-care industry and alleviate a great deal of human suffering.
On another level, some would say that continuous thinking enables the business savvy to see around corners or predict the future. But the fact is, they don't always get it right—it just looks as if they did, as they are constantly formulating plans and making
adjustments. "Every new venture has its ups and downs," Pappajohn said, "and literally not a single one of my ventures has ever come through without a change in plans along the way." Because his mind is constantly active, he can anticipate problems just as well as he can anticipate successes. Thus, he's formulated solutions well in advance, the only way to be proactive.
Synthesizing
With such a profusion of information, the business savvy need a superior ability to sort and prioritize data, especially in today's environment of information overload. Information comes at us faster than ever before, and it's available twenty-four hours a day. Plus, it arrives in greater quantities, and in many cases in ways we can't control: Between e-mail and text messaging, it's not at all uncommon for even the average person to receive between fifty and one hundred messages per day. Messaging alone can easily bog people down in a morass of data. With so much information cluttering the brain, we can easily turn into nothing more than data collectors. Thus an ability to sift, sort, prioritize, store, discard, and stitch together information sets the business savvy apart from others.
Synthesizing is exactly this process. It is the process of turning the data we receive into salient information. In the February 2006 issue of the Harvard Business Review, Harvard professor Howard Gardner writes about The Synthesizing Leader. Gardner states, "The ability to decide which data to heed, which to ignore, and how to organize and communicate information will be among the most important traits of business executives in this century." He goes on to reference the Nobel Prize-winning physicist Murray Gell-Mann, who thinks that the most valued personal trait of the twenty-first century will be a facility for synthesizing information.
Synthesizing is a necessary complement to continuous thinking, and even to systems thinking, both of which can end up overwhelming a person with data. The business savvy can easily discern the difference between data—what amounts to useless detail—and information that is vital to decision making. Many individuals drown in data, whereas the business savvy rise above the tides. They continually search and sift for good information to make sound decisions.
With the mountain of data that pummels Pappajohn every day from each company he works with (business plans, monthly financials, board reports, memos, e-mails, and phone calls are only the tip of the iceberg), plus the more than one hundred proposals he's given each year for potential investments, plus the inestimable intricacies of staying apprised of so many ventures at once, not to mention the overall health of the market, he simply could not manage, much less excel as he does, without being a master synthesizer. Ironically, Pappajohn uses a simple, even old-fashioned method to stay on top of the surfeit of information concerning his current business concerns: He keeps a handwritten list and carries it in his pocket.
Knowing What You Don't Know
The flip side to staying always on top of new information is knowing what you don't know. It's not as mysterious as it sounds. It's a matter of being aware of where your information voids are, of knowing where your area of expertise stops, and, in some cases, where another person's begins. It's also a matter of not acting until you obtain all the information necessary to make a sound decision. Some may accuse the business savvy of procrastination from time to time, but knowing that making decisions without an adequate information base can be detrimental to them and their businesses, they do not act until they're sufficiently informed.
What sets the business savvy apart from those who are merely aware of the voids in their knowledge base is how they deal with these gaps. The business savvy research and learn until the information void is filled, or, in cases of highly specialized knowledge, they delegate a task to a qualified individual or hire a person with the kind of human capital they need. In every situation, they are known for their penetrating questions. They're able to drill down until they've reached the root cause of a problem or uncovered the seeds of opportunity. This is how they make some of the most difficult things look intuitive.
Those who work with Pappajohn know of his ability to drill down with questions. He doesn't make a move until he's thoroughly researched the market, the business plan, the people involved with executing the plan, and the new business's chances of success. No one is surprised when Pappajohn turns down a business opportunity when even a small glitch with people, places, or timing shows up. But many are surprised that, coming from a man who goes out of his way to stay fully informed, one of the very reasons he turns down an opportunity amounts to knowing what he doesn't know. "There were certainly times when a deal sounded attractive and even quite lucrative that I declined to get involved," he said, "because I did not know the space like I knew I needed to." Those who are savvy-challenged would not act with such prudence. They would plunge in headlong despite not being adequately prepared.
Communication
Peter Senge identi.es two types of communication within an organization—discussion and dialogue. He states, "In discussion, different views are presented and defended. In dialogue, different views are presented as a means toward discovering a new view. . . . Dialogues are diverging; they do not seek agreement but a richer grasp of complex issues."
The foundation for excellent communication of any type is excellent listening. Doug Stickney explicitly pointed out Pappajohn's skills at listening, but Pappajohn's ability to gain a unanimous vote from board members alone demonstrates both his listening and his communication abilities. Certainly there is dialogue among members, but if Pappajohn is convinced of the rightness of a certain position, he can and will use discussion to explain and endorse his opinion. That he gains that unanimous vote every time attests to his superior communication abilities.
The business savvy have a constant awareness of the uses of dialogue and discussion. They intuitively know when it's important to collect information and ideas. They know when unwavering direction and conviction are required, and they deliver marching orders. They know when and how to deliver the "rubber hits the road" or the "pedal to the metal" message.
Empathy
The business savvy have excellent intuition. This is because they know their area of business so thoroughly and are prepared to the extreme. It is also because in communicating and dealing with others, they have a superior ability to gain empathy. Empathy is the ability to understand intuitively the thoughts and feelings of other people, to "put yourself in their shoes." This enables the business savvy to have a good understanding of what others are thinking and feeling, which allows them to stay consistently a step or two ahead of the game.
When it came time to determine valuations for Quantum in its early days, Pappajohn in essence advised Stickney to think like an investor, to step into potential investors' shoes and determine what would draw them in and what would dissuade them. As we've seen, an inflated valuation would certainly have dissuaded them, so Stickney set a reasonable valuation, and not only did he find investors, every single investor returned, and everyone involved made money. Then, when Stickney ran up against the situation with his brother and turned to Pappajohn for advice, Pappajohn was able to put himself in the shoes of both Stickney and Quantum's potential investors. He felt for Stickney and his brother, but thinking like an investor, he also knew that a personal loan could not be funded by the company. In the end his empathic abilities allowed him to find a good solution for everyone.
Based upon Pappajohn's amazing success record, it's clear that he can walk in the shoes of employees, stockholders, potential investors, board members, and the customers of the companies in which he has invested. There is no better means for devising ways to keep employees happy and stockholders content or get a meeting of the minds among board members than being able to see the thoughts, feelings, desires, and objectives of others.
The Adversity Paradox
Especially if you're smack in the middle of adversity, perhaps it seems like a stretch, a leap of faith, to believe that overcoming difficulties will enable you to develop the type of business savvy that facilitates the kind of success Pappajohn has had. Well, it isn't! In fact, it shouldn't be hard to believe at all. If you can do with adversity the extraordinary things Pappajohn has done—if you can accept it, determine not to let it stop you, overcome it, and in fact use everything overcoming adversity taught you to your advantage—you can expect extraordinary results. The stories in this book are quite diverse, but everyone you'll meet here went through a similar process of experiencing adversity, overcoming it, and learning from their struggles—their victorious struggles.
Like it or not, adversity will find its way into every life. Some of you may be struggling with adversity right now, and some of you will be facing adversity down the road. But what if right now, as a first step, you begin to think of adversity in a different light? What if you think of adversity as an opportunity to make positive adjustments to your trajectory and to acquire the kind of business savvy you can't get through school, seminars, training programs, or even doing your job day to day? These "trajectory adjustments" are going to be part of your future. Let's make sure every adjustment leads upward.
The Adversity Paradox Takeaways:
How You Can Recognize Business Savvy
Let's review the core competencies of the business savvy demonstrated by John Pappajohn, and then you can take your own business-savvy inventory:
1. Systems thinking: seeing and understanding the big picture
2. Linear thinking: seeing and understanding each discrete part of the big picture, and being able to close in on specific tasks and execute them
3. Continuous thinking: having "visionary" skills, the ability to anticipate problems and opportunities, be prepared for them, and react quickly
4. Synthesizing: the practice of sorting and prioritizing salient information from data
5. Awareness of information gaps and voids: being constantly aware of where your information voids lie and responding appropriately by learning more, turning to others for help, or both
6. Communication: the ability to communicate with either dialogue or discussion
7. Empathy: the ability to discern and identify with what others are thinking and feeling
Excerpted from THE ADVERSITY PARADOX by J. BARRY GRISWELL AND BOB JENNINGS
Copyright © 2009 by J. Barry Griswell and Bob Jennings
Published in April 2009 by St. Martin's Press
All rights reserved. This work is protected under copyright laws and reproduction is strictly prohibited. Permission to reproduce the material in any manner or medium must be secured from the Publisher.
Table of Contents
Introduction J. Barry Griswell ix
1 What Is Business Savvy, Anyway? 1
2 The Individual Human Capital of the Business Savvy 26
3 The Power of "And Then Some": The Connection Between Adversity, Individual Human Capital, and Business Savvy 55
4 Just Add Introspection: Human Capital Component No. 1 83
5 What Does Behavior Have to Do with Values? Everything! Human Capital Component No. 2 104
6 Work Character-Sorry, but There's No Substitute for Hard Work: Human Capital Component No. 3 129
7 Purpose and Passion-You Really Can Take the Work Out of Work: Human Capital Component No. 4 162
8 The Transformative Power of a Lifelong Thirst for Knowledge: Human Capital Component No. 5 191
9 Using the Adversity Paradox to Triumph Over Unexpected Trajectory Changes 212
Epilogue: Practicing the Paradox 240
Appendix 243
Notes 249
Acknowledgments 255