The Art of Being Unreasonable: Lessons in Unconventional Thinking

Who wasn't tormented in high school for having the wrong lunch box, the wrong clothes, the wrong haircut, the wrong something? According to his classmates, Eli Broad, the creator of two multi-billion-dollar businesses and co-founder of the Broad Foundations, had the wrong surname. So one day young Eli took matters into his own hands and changed the pronunciation of it from "Brod" to "Broad" (rhymes with "road"). While the teasing continued, it didn't seem to sting as much, Broad explains in his new memoir, The Art of Being Unreasonable: Lessons in Unconventional Thinking, because "I had changed myself."

Broad's 192-page book aims to show the reader "how applying unreasonable thinking can help you achieve goals others may tell you are out of reach, just as it has for me." Indeed, it is precisely that ability to reframe facts and ideas in novel ways that enabled Broad to buy his first car, a 1941 Chevy, with $200 he earned selling stamps purchased in bulk from Chrysler International. A New Yorker whose parents moved to Detroit "without my consent," he subsequently graduated from Michigan State University in three years and immediately jumped into the world of business, becoming, at age 20, the youngest certified public accountant in the state.

After losing that job because his boss didn't like the fact his young employee kept pestering him for a raise, Broad launched his own firm in 1956, sharing office space with his wife's cousin's husband, Donald Kaufman, a homebuilder who spent much of his time working as a subcontractor. Shortly thereafter, the men combined their talents to create the Kaufman and Broad Home Corporation, later known as KB Home. Broad, who understood early on the value of meticulous research, had learned from reading industry publications that basement-less homes were being built — and sold — in other cities, and he was convinced the same could be done in Detroit. And that's what he and Kaufman did. Broad also studied the methods of the biggest homebuilders in the country to learn how they kept their costs down and modeled Kaufman and Broad's practices after them. "We would treat land as just another raw material, like lumber or nails," writes Broad. "We would buy it when we needed it and let someone else own it when we didn't." The company also expanded into the mortgage industry "so customers could more easily arrange financing when they bought one of our houses."

Realizing after a number of years that homebuilding was a cyclical industry, Kaufman and Broad decided to purchase a life insurance company in 1971 for $52 million. Once again, Broad's research, which underscored the fact that insurance tended to perform well even during bad economic times, was a key factor in the decision. As a result, in 1974, with the first Arab oil embargo putting the screws on the U.S. economy and KB Home suffering its worst year ever, Sun Life helped the company weather the storm. More than a decade later, the company, by then SunAmerica, began selling retirement savings products to 40-something baby boomers, which proved to be a lucrative business indeed. Kaufman and Broad finally decided to sell the company to American International Group (AIG) in 1998 for $18 billion. As Broad writes:

Kaufman and Broad and SunAmerica both prospered beyond all expectation because I was unreasonable enough to ask fundamental questions about unexamined assumptions. 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.

Although The Art of Being Unreasonable isn't organized chronologically (something that took this reader a while to get used to), each of its chapters uses a relevant milestone from Broad's long career to provide a valuable life lesson ("The Value of Being Second," "Do Your Homework No Matter How Much Time It Takes," "The Logic of Being Logical"). And along the way, he highlights the importance of a paperweight he received from his wife, Edythe, inscribed with a quotation 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 on the unreasonable man."

Which makes it a little odd that Broad seems to chafe at the label when applied to him by others. That's perhaps most evident in his retelling of some of the his philanthropic activities, such as the time he helped raise more than $200 million from notoriously tight-fisted Los Angelenos to build the Walt Disney Concert Hall, a project many in Southern California thought would never get off the drawing board. It succeeded, writes Broad, not because he was unreasonable but because he like to get involved in things that other people think can't be done and find a way to make them happen.

The book offers other brief but fascinating glimpses into Broad's wide-ranging philanthropy, much of which today is organized and implemented by the Broad Foundations. Among other things, Broad and his wife have been instrumental in establishing the first biomedical research institute in the world devoted to genomics, created the largest urban education prize in the country, and been key figures in nurturing the burgeoning contemporary art scene in L.A., which they have called home for three decades.

Broad credits his parents, who owned a five-and-dime and were always generous with their time and the resources they had, with teaching him the importance of giving back. Following their example, he and Edythe have adopted a hands-on approach to their philanthropy, which Broad believes is a "more meaningful way to give back." The Broads are actively involved in the work of their foundations and are famous for asking three questions before making a philanthropic investment: Will the grant make a difference in twenty years? Will the project happen without our support? And are the right people in place to make it happen?

Of interest to business executives as well as leaders in the nonprofit and philanthropic sectors, The Art of Being Unreasonable makes clear that the road to success is paved with hard work and out-of-the-box thinking. And who can't relate to advice such as "[A]sk a lot of questions, pursue the untried, revise expectations upward, take risks, be restless, and most important, seek out the best in your work the best deal, the best investment, the best people, the best causes, the best art and the best in yourself." For those brave enough to emulate his approach, the still-energetic Broad has written a solid guide to help you do just that.

Regina Mahone
Staff Writer, PND
Foundation Center
New York, New York