Even at a very young age I was aware of the barriers—threshold resistance—I would have to overcome to enjoy the level of success I could only dream about. Early on, I discovered that hard work broke through a lot of those hurdles. If it took me all night to read a simple chapter in a textbook, I put in the time. For spending money I cad-died at local golf courses when I was nine years old. You could make $1.10 for eighteen holes.
I also learned some early lessons about what works in retail. From age eleven through high school I worked afternoons and weekends in Sims, a discount department store on Saginaw Street in Pontiac. They were smart merchants, selling inexpensive goods for working people. I learned a valuable lesson one day when an irate mother came into the store to complain about a pair of shoes I had sold her for her young son a few weeks earlier. The boy had very narrow feet, and I had fit him terribly. I gave her a new pair and offered to have the cost taken out of my pay. The Simon brothers, who owned the store, immediately took me up on my offer.
At Sims I learned how to seductively display a tie with a new shirt, suggest a second pair of shoes, and recommend a color to complement a particular skin type. Selling was fun, and I was good at it. I also learned to recognize the difference in quality between one garment and another. Single-stitch sewing made all the difference in a dress shirt’s look and life. Cheaper double-stitched shirts, which creased and bunched at the seams, became rags after a few washings. Unless a customer needed his new shirt only for church on Sundays, the savings for a cheaper shirt never made sense. It was satisfying to help shoppers through these important decisions and earn their trust. It was a great feeling to have customers come into the store and specifically ask for me—especially if they asked one of the Simon brothers!
After graduating high school in 1942, I enrolled at the University of Michigan to study art and architecture. But before I could learn the words to the fight song, geopolitics altered my agenda. After Japan bombed Pearl Harbor, on December 7, 1941, my buddies and I couldn’t wait to enlist. We naively feared that the war would pass us by if we didn’t hurry. There certainly was no lack of clarity regarding our country’s reasons for taking on the Japanese and the Germans. It was around this time that I stopped using my first name, Adolph.
I entered the Army Air Corps in 1942, hoping to become a pilot. But a near-fatal accident during flight training in Oklahoma convinced me I was better off and more useful to Uncle Sam in intelligence, principally charting, mapping, and taking aerial photographs to assess after-action damage. My service with the Thirteenth Air Force was in the Pacific theater—New Caledonia, New Guinea, Guadalcanal, and Okinawa. We’d fly out several times each week and come back exhausted. And in the middle of the night, Japanese planes would come and drop a few antipersonnel bombs, just to keep us up. My most vivid memory is of the devastation I saw and reported over Hiroshima, Japan, in the weeks after the first atom bomb was dropped in August 1945 (a second bomb would be deployed over Nagasaki three days later). Typically, I could confirm hits and damage to key targets by identifying landmarks and lining up street grids. That day in the heart of the city there were no surviving landmarks and no street grid. Seen from ground level, the destruction in Japan was even worse. I remember driving from Tokyo to Yokohama in a jeep. There were no highways, so we followed the surface streets. The street patterns were immaculate. All the houses had burned down, and only the chimneys remained standing. We drove for miles and miles and didn’t see any people. I pray that our planet will never see anything like that again.
When I came home from the war at the end of 1945, I returned to the University of Michigan in Ann Arbor with some assistance from the GI Bill. It wasn’t the typical college experience. To begin with, I was twenty-one and in a hurry to get on with my life. I joined a fraternity, Phi Sigma Delta, and became head of the food department, which meant I got free meals. I enrolled in the architecture school and enjoyed the classes. At the time, the architects teaching us had been trained in the Beaux-Arts school, so we were taught to draw the great cathedrals like Chartres and Notre-Dame, with their flying buttresses and trusses. I also dabbled a little in painting.
Carlos Lopez was one of my favorite professors at the University of Michigan. He taught a painting course in the fine arts department and was an accomplished artist himself. Unfortunately, much of the time I should have been in class learning from Professor Lopez, I was on the golf course or looking after one of my fledgling campus businesses. Nevertheless, I loved his course and enjoyed painting very much.
At the end of the semester, as grades were being finalized, Professor Lopez called me to his office to give me two things I’ll never forget: a C and a drawing. The C, he explained, was the highest grade he could muster, given my regular absence from class. The drawing, one of his own india ink and wash depictions of a falconer, was a gift to encourage my continued interest in art.
“You have promise, Alfred,” I remember him saying, “but you will not find it on the golf course.”
The wonderful drawing, the first piece of art I ever owned, still hangs in my home. And the professor’s words still ring in my ears. Since that humbling meeting more than a half-century ago, my golf game has shown more deterioration than brilliance, but my love of art has blossomed into one of the joys of my life.
I did spend some time on the golf course, but I also spent a lot of time working. I always had a few jobs during school. With no money for anything other than tuition, I immediately visited the local shoe store and offered the proprietor a proposition that was either creative or desperate. Instinctively understanding that convenience trumps threshold resistance, I would visit the on-campus sorority houses just after dinner with an assortment of stylish women’s shoes from the store’s inventory. With the permission of the housemothers, I displayed the shoes on the stairway leading up to the girls’ rooms. As they finished dinner, they would pass by my display, I would take orders, and they would pay for and pick up their new shoes at the store in town over the next few days. I would hand the girls a slip of paper designating the style and size of their shoes. I always guessed their size correctly (honestly, I never missed), but the girls didn’t see the size on my order slip. I had devised a graph (styles down one column, sizes across the top) with the store owner to create a code only we could decipher. Believe me, nothing kills a sale faster than suggesting to a girl who wants to be a size six that she really is a size nine.
Shoes at that time ran about $18 to $26. I could sell a dozen pairs each night, netting $1 per pair. If the shoe was a slow-selling model, the store owner gave me a bonus of 50¢. Not a bad way to make ends meet and meet girls at the same time!
My experience as a shoe salesman came up decades later in 2003 at a conference in Philadelphia sponsored by the University of Pennsylvania Wharton School’s Samuel Zell and Robert Lurie Real Estate Center. Professor Peter Linemann invited me to participate on a “Living Legends” panel with real estate giants Gerald Hines and Walter Shorenstein. And it turned out that the three of us had worked as shoe salesmen early in our careers. Linemann asked if there was some lesson to be learned from our shared experience. Gerry and Walter did their best to stay serious, but I couldn’t help myself. “Looking back,” I answered, “I can say that the best thing about being a shoe salesman was the view.” After a few awkward seconds of pondering my reply, the audience roared with laughter. Thank goodness.
I also got into the wholesale business. Around prom season at the University of Michigan I assembled a sales force of fellow undergraduates to stream through the dormitories and fraternity houses, taking orders for corsages, which I priced well below the local florist. On prom day, I would drive to Detroit’s Eastern Market to buy the corsages wholesale, rush back to campus (at least, as fast as my finicky 1940 Ford would take me), where my sales team was waiting, equipped with a fleet of bicycles. Orders were delivered fresh right to the customers’ doors.
I didn’t know it at the time, but I was developing my own theory of thr
eshold resistance throughout these formative years. I saw opportunities where others hadn’t. I learned the value of service and convenience, as well as presentation and delivery to pull the customer toward a new opportunity. I learned that a lack of capital was no barrier to entry if you had a good idea. And I learned that my strengths were far more important than my shortcomings, and that even the most difficult personal and business challenges—whether physical or psychological—could be overcome if understood and confronted forcefully.
I learned something else about myself in those years, too: I was impatient. I was eager to get out and take advantage of what I saw as a world of opportunity. And so I left Ann Arbor (with three years of credits, thanks to my war service) and enrolled in night school closer to Detroit at Lawrence Tech to continue my architectural training. I proposed to my college sweetheart, Reva Kolodney, and went to work for Charles N. Agree.
So by the time I mustered the confidence to hand Milton Petrie the sketches for my alternative store plan, things were beginning to fall into place.
TWO
Creating My Own Path
Why do people start their own businesses? Do entrepreneurs share certain personality traits? What motivates someone to abandon the predictable safety net of corporate life? Academic scholars are just now beginning to study these issues in a systematic way. I’ve never taken a scientific survey, but from a lifetime of close observation, I’ve reached a few of my own conclusions. I think men and women who go it alone in business are different. Because of that, they’re also very insecure, which is not always a bad thing.
At root, it’s really not about a propensity or a desire to take risks. No, it’s about a different perception of what risk means. Entrepreneurs often see staying put as a more risky proposition than moving on. That’s certainly how my father saw things, and I know it’s how I approached life. For whatever reasons, many entrepreneurs don’t grow up comfortably fitting in. I certainly didn’t. Some are shy, others physically unattractive, many are from dysfunctional or disadvantaged family backgrounds, and still others are just smarter than those around them. But unlike people who allow these types of challenges or differences to get in their way, entrepreneurs—regardless of race, religion, or gender—seem to understand that being different makes it necessary to create their own paths. That’s a powerful motivation.
Creativity and optimism are other common traits among people who start businesses, found organizations, and push innovation. Ideas drive them. They want to be a certain type of person and achieve a special dream that keeps forming and calling to them in their minds. But growing up different has convinced them that the only person they can really count on to make it all happen is the person they look at in the mirror every morning.
In 1950, at age twenty-six, I turned to the guy in the mirror, and with a $5,000 loan from Manufacturers National Bank of Detroit (now part of Comerica), started paving my own path. I wanted to use everything I had learned at Sims, in school, in my military travels, and in my brief career in the field to design and build extraordinary retail properties. I wanted to create places where customers would want to shop and retailers would want to do business—more business than they had ever done before.
At this point, I felt that I had a decent amount of experience. I had worked as a draftsman and store planner for the architect Charles Agree. Agree specialized in retail, and I learned a great deal designing interiors for drugstores and department stores. We would work with tenants to determine where they wanted to locate key departments, and I began to understand the way retail traffic flows through a store. But I realized that while I enjoyed architecture and drawing, I really wanted to build. Part of it was for lifestyle reasons. I couldn’t see anyone in architecture who had done well financially. I remember the great architect Frank Lloyd Wright coming to the University of Michigan and telling us that you could either marry somebody rich, inherit wealth, or starve to death. None of these seemed to me to be a viable option. And when I looked over the horizon, I saw that there was money to be made by people who could build and own stores or, better yet, groups of stores. And part of it was temperament. I preferred the energy and excitement of construction sites and negotiating deals to sitting at tables and drawing.
My first move was to leave Agree and join the construction firm O. W. Burke, where I began to supervise job sites and learn a great deal about how buildings are actually constructed. By 1950, I felt ready to go off on my own.
I ran the office, which we opened in Pontiac. My father, who was delighted to come out of retirement to be my partner, handled the field operations and provided some much-needed credibility with the bank. I looked young for my age in those days, and my dad brought some gray hair (and years of valuable experience) to the enterprise.
The partnership reminds me of an old joke.
A joint British-French panel is reviewing proposals to select the construction contractor for the massive “Chunnel” project. The largest construction companies in the world—several combining into consortiums—are bidding to construct this massive public works project. The tiny Cohen and Son Construction Company, of Queens, New York, is also bidding.
A skeptical judge asks the senior Mr. Cohen: “In your company’s proposal you pledge to complete this work in half the time at less than half the cost of any other competitor. How could this be possible?”
“Very simple,” responds Mr. Cohen with confidence and a thick Yiddish accent. “My son vill be stationed on the French side of the Channel, and I vill verk from the British side. Ven I say dig, ve dig! That way ve’ll be done in half the time at half the cost.”
“Mr. Cohen,” the official asks, “what happens if you and your son fail to meet in the middle?”
“Then you’ll have two tunnels for the price of one!”
Well, my father and I did not set out to join two continents, or to change the world. But we certainly put together our share of ambitious proposals. Our first job, however, was a modest free-standing bridal shop, Mrs. Ray’s Bridal Salon, across from Federal’s department store on Oakman Boulevard in northwest Detroit. The contract with Mrs. Ray (which I used as collateral for the Manufacturer’s loan) called for design, construction, and fixturing—what we in the building trade call a turnkey job. Mrs. Ray, an authentic entrepreneur herself, could literally show up with her inventory and a cash register and be in business. The store was a big success and we had our first satisfied customer.
Fortunately, work came to us on a pretty steady basis during our first few years. We quickly graduated to department stores, an occasional hotel, and a few strip shopping centers. As our workload grew, so did our company. Dick Kughn joined us in 1955 as our estimator and would quickly become a partner and rise to the position of president, a position he held until he retired from the company in 1983. I was glad to have Dick on board. Being responsible for an ever-expanding family of employees was one of the most difficult aspects of business for me.
At our first company picnic, I remember looking out at the employees and their families on the lawn and seeing instead a very large nest of birds, all craning their necks, mouths wide open, calling for food. That’s when it really hit me just how responsible I was for their well-being. If I screwed up, their children’s teeth wouldn’t be straight or white, and their mortgages wouldn’t be paid. I knew I needed great people to help my business grow, and I deeply appreciated my employees’ commitment, but the responsibility I felt for them and their families was at times overwhelming.
I still remember the feeling in the pit of my stomach when I received a phone call at home in the middle of the night from the father of one of our young secretaries. Our employees had all gathered earlier that evening at a restaurant in Detroit for our company Christmas party. Apparently, this young woman, who still lived with her parents, had decided to spend the rest of the evening with one of our not-so-young executives. That was the last company party we had for many years, and I made sure that everybody had Dick Kughn’s home
phone number.
I was pleased with my progress, professionally and personally. Reva and I were married in 1948 and settled in an apartment in Detroit. Our first child, Gayle, was born in 1951, and Robert followed in 1953. William completed our clan in 1958. But I was eager to take on larger building projects, and in 1953, I saw an opportunity. A friend from school, Irving Rose, pointed me in the direction of a troubled project in Flint, Michigan. An out-of-town developer was putting up a large (for the time) group of stores, anchored by a Federal’s department store, but had made a mess of the design and execution. The original developer had designed it to connect to a nonexistent sewer in the street, to cite one example.
At the time, Flint was a growing and prosperous market, with its huge Buick plants. The Taubman Company stepped in and completed the project. And we did something comparatively radical: we moved the stores from the front of the lot to the back, and put the parking in front of the retail stores.
North Flint Plaza was a success and gave us the confidence to plot our own larger-scale developments. In 1957, we completed the forty-store Taylortown Shopping Center in Taylor, Michigan, and in 1959, we started work on our first large mall—the single-level Arborland, a large center near the University of Michigan campus, which included a Montgomery Ward, Kroger, JCPenney, and S. S. Kresge. We broke ground in early 1961 on the 350,000-square-foot project. Montgomery Ward alone took 120,000 square feet, and the entire project cost about $5 million. These were the first of what would prove to be a very fruitful and profitable line of business for the company.
In the mid-1950s, I also formed a friendship and partnership that would be as fruitful and profitable, economically and personally. Through doing business and living in the Detroit area, I had gotten to know Max Fisher, who was one of the most successful entrepreneurs in the state and in the country. Max, who had made a fortune in the oil industry, had acquired the Speedway chain of gas stations to distribute fuel from the successful refinery business he had built in Detroit during and after World War II. He asked me to help transform them from discounters into a new merchandising and service concept. I designed an innovative fascia treatment for the stations, using just-introduced outdoor fluorescent lighting (prior to this technological breakthrough, expensive, hard-to-maintain neon tubing was the only exterior option). By creating what was essentially a large plastic light box along the front of the service building, we dressed up the station with a brilliant illuminated sign for Speedway 79, easily read by motorists zooming by. Max eventually hired us to redesign and remodel a very large number of his stations. He became a lifelong friend, mentor, adviser, and partner.
Threshold Resistance Page 2
