CHAPTER ELEVEN:

Nietzsche believed a good education from the “School of Hard Knocks”— not from any university—is a required form of character development.

Graduates of today’s formal educational institutions have learned some tools for knowledge acquisition, but they haven’t yet acquired true knowledge. True knowledge comes only from doing, learning and failing, preferably in the School of Hard Knocks.

Formal education, especially in a highly dogmatic and somewhat ossified society, is inversely correlated to truth-seekers. The more “education” you have, the more you believe you “know,” when, in fact, true knowledge comes from doing.

Nietzsche notes that education is “essentially the means of ruining the exceptions for the good of the rule.” And higher education is “essentially the means of directing taste against the exceptions for the good of the mediocre.”

In other words, education is meant to fundamentally enforce the current culture, society, and the powers that be. It is meant to educate you to prefer the status quo. It is meant to give you the false premise that you know something. Such an education to induce conformity in our youth is highly corrosive to their free will and ultimately corrosive to an open society.

As Nietzsche stated, “The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently.”

Education in classrooms largely started with German Chancellor Otto von Bismarck, when he wanted to build a training system for soldiers in the Prussian army. If you want to train infantry soldiers for battle in 19th century European ground wars, classroom training can be very effective. Bismarck’s educational system worked well, and the Prussian army forced the unification of Germany and created the German Empire.

Today, we are thankfully not fighting infantry battles in Europe. Even if we were, the education of a modern warrior would involve little classroom training and lots of experience in the field. Yet, classroom training lives on and has largely outlived its usefulness.

Graduating with a Harvard MBA is dangerous in that you might be inclined to believe you know how to run a business. This is not the case. Running a business requires experience—and experience requires failure.

A reporter once asked Walmart founder Sam Walton, “How did you become so successful?” Walton answered, “I’ve made a lot of good decisions.” When he was then asked how he learned to make good decisions, Walton replied, “By making a lot of bad decisions.”

Formal education is about studying and learning from what is already known. It is about following rules, procedures, schedules, and predetermined formats. Business is about navigating the unknown. It is about inventing and creating entirely in the absence of procedures and pre-determined formulas.

The best scholars in formal education know everything. The best business people assume they know nothing. In formal education, there is a clear demarcation between students and teachers. In business, the best leaders are always the students.

In 1872, Nietzsche presented a series of five lectures called “ On the Future of Educational Institutions.” He had no time for a higher education system determined “to make man into a machine by teaching him how to suffer being bored.” He believed “the doer alone learneth,” a nd “that which does not kill us makes us stronger.”

If you are not doing, learning, and failing, you are not getting stronger. In
fact, you might be getting weaker. Going to prison for up to seven years is not going to kill me; rather, it means, by definition, that it is going to make me stronger.

We learn so much from doing. And we stifle so much with formal education. Far too often, formal education is pampering and insulation from the experimentation and battles that build real knowledge and wisdom.

Thomas Edison (1847–1931), one of America’s greatest inventors and businessmen, spent only 12 weeks in school. Edison was a sickly child. When he finally got to school, his teacher pronounced him “difficult.” Edison’s mother, an accomplished teacher, took him out of school and taught him from home. It was the perfect education for this curious, energetic child. He developed a love and ability for independent learning that would propel him through life.

Edison also had a great gift of learning from experience. As he famously believed, “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Edison “got his hands dirty.” When he was 12, he was selling newspapers on the Grand Trunk Railroad line. He soon created his own paper, The Grand Trunk Herald, and sold it to passengers. By 15, he had learned to operate a telegraph. For the next five years, he traveled through the Midwest reading, studying, and experimenting with electrical science in his spare time.

At 19, while working the night shift at The Associated Press in Kentucky, he made the most of his time by developing a method of thinking without biases, proving things to himself through objective examination and experimentation. By 22, he sold his first invent ion and earned enough money to devote himself to discovering needs and creating solutions. It is an education that is unthinkable for so many of us now, but we can see so clearly the lessons of perseverance, inquiry, experimentation, and innovation that Edison learned on the road.

Steve Jobs is another example. His formal education looks like a mess. He was labeled as “difficult” in elementary school, although his parents stood by him. He was a loner who was bullied in middle school. In high school, he was equally fascinated with electronics and literature. Jobs dropped out in his first semester at Reed College without tellin g his parents. He attended classes—famously, Robert Palladino’s calligraphy class—slept on the floor in friends’ dorm rooms, got money from returning Coke bottles and ate for free at the Hare Krishna temple. Formally, not a lot going on. Informally, Jobs was learning about electronics beside his father, a machinist, making personal connections that would found Apple, exploring ways of thinking, learning about digital technology and finding out what products sell.

Bill Gates, the founder of Microsoft, dropped out of Harvard in 1975 after a year to pursue his passion for coding. By 1981, Microsoft had a revenue of $16 million. It was what Gates learned from his own initiative and inquiry that made all the difference to his life. You know this for yourself. When you think back over the lessons you have learned in life, so many of them were in the doing; so many were outside formal classrooms and lessons.

For Hegel, life is a process, not an end. We reach a point of understanding; that state is challenged; we reach a new understanding, and the process begins once again. Once we stop questioning and working toward synthesis, we stagnate. It is so important to keep learning and keep doing what you love. The minute you feel life is at an end, that you have nothing more to learn, that there are no more surprises, it’s over and you die. If you are always growing, you are always learning, you are always stretching, you are always alive—right up to the day you physically die.

Three of the men I most admire are working and learning into their 80s and beyond. The chairman of the Global Growth board, George A. Vandeman, challenges himself every day at the age of 80.

George’s career has been one of constant learning, striving, and growth. Before coming to Global Growth, George was chairman of the board and a director of MPG Office Trust (a Southern California-based office property REIT) until its sale in late 2013. From April 2006 to November 2008, George was a member of the board of directors of ValueVison Media, Inc., operator of the cable shopping channel ShopNBC. He also served as vice chairman of the board of Genelux Corporation, a San Diego-based biotechnology company. And, until recently, he was a member of the board of directors of Symbio Pharmaceuticals, Limited, a publicly traded, Tokyo-based biotechnology company. In addition to serving on these boards, as an attorney George advised hundreds of boards of directors, including boards of some of the world’s largest companies.

From 1995 to 2000, George was senior vice president and general counsel of Amgen and a member of its operating committee, a company with revenues of $23.75 billion in 2019. Before joining Amgen, George was a senior partner and head of the mergers and acquisitions practice at the international law firm, Latham & Watkins, where he worked for nearly three decades. His client list at Latham comprised a “who’s-who” of American business and entertainment, including Marvin Davis, Ted Turner, Merv Griffin, John Forsythe, Aaron Spelling, Hard Rock Café, Holiday Inns, Michael Jackson, Imagine Films, and Nestlé USA .

George was also the founding shareholder of KHNR, an all-news station featuring CNN Headline News Radio, in Honolulu. He was the architect of and a principal in the acquisition of Los Angeles television st ation KTLA, Channel 5 in 1983 by Kohlberg, Kravis, Roberts and the subsequent sale of that station in 1985 to The Tribune Company. He was also a founder of Cinema Group, an independent motion picture production company, and VideoNet, the first live-via-satellite teleconferencing company. George was a member for many years and past chair of the board of councilors at the University of Southern California Law School.

My oldest employee, Stan Sanoff, was born in 1926. That’s right—1926. He works for us five days a week as our assistant general counse l in California. Stan is the epitome of someone who has never stopped learning. As a young man, he left school before he matriculated to play jazz clarinet in New York. When his family moved west, he set up a credit collection bureau. From 1954 to 1963, he grew his business.

Nearly 10 years in, Stan was getting “bored of the business world.” When a client of Stan’s confided he was about to leave his job to start practicing law, Stan was shocked. “I didn’t even know you could go to law school!” It was a life-changing revelation. Stan enrolled in Southwestern School of Law. He had never been considered a “natural student” but in the second week, he knew he was exactly where he should be. He graduated magna cum laude despite having to juggle his studies, two young children, and running a business. Apart from his seven holes-in-one on the golf course, his graduation honors are his proudest achievement.

Stan has worked in law ever since. At 96, he jokes that “red wine and good genes” are his fountain of youth. I know from working with Stan that his strong life force is also because he never stops learning. California labor law changes every year, every week; it’s very complicated. Stan is up on all the laws. That’s my inspiration—to be 96 and still learning.

I met Les Sufrin in 2001, when he helped Global Growth with the acquisition of The Coding Institute. Les has been like a father to me ever since. He introduced us to our first lenders, helped us clo se our first acquisitions and provided wise counsel on myriad life and business matters. Global Growth would not exist today if it weren’t for Les Sufrin.

In 1975, Les left his comfortable job with a big accounting firm to start out on his own. From day one, Les had clients who recommended him to other clients, and so his firm grew. Thirty years later, he sold his business to a French firm and kept working for Global Growth.

Les’ success has been founded on consistently providing the best possible client service. The lesson he passed on to his staff was that “the most important thing in client service is your work ethic. You have to be fully committed, 24/7, to the work ethic. There’s a need for balancing home and professional life, but when you are engaged in doing the work, you should be 24/7 in that engagement and totally focused on service.”

From this work ethic, Les built a professional business he is rightly proud of. “My greatest thrill has been taking a start-up professional accounting practice from nothing and building it into a ver y reputable firm that enjoys an international reputation and also being able to provide a livelihood and professionalism to all my employees over the years.”

One of Les’s other great joys is bringing together an insight into the numbers and an understanding of the business. He calls it “marrying the words and music.” Born in 1941, Les is aged 81. You can hear his enthusiasm for people, their stories, and their work in his voice.

“Every client represents an opportunity to learn more about another business, another industry. Every new client is like an additional graduate degree.” Les’ other tips for success include: “You have got to stay in touch with everyone. You can’t stand on ceremony. And try to do the right thing, always. I like to help people, which comes from my work. You want to help people succeed and support them through adversity.” In between working and connecting with existing and new clients, Les fits i n time to visit museums, galleries, and the opera with his wife. Les has lived a life that is rich with risk, reward, and return. His dedication to learning and constantly extending his knowledge is a quality I admire deeply.

In a 2009 profile in The New York Times, Jim explained that when his wife, Joanne Ernst, announced she thought she could win an Ironman triathlon, Jim resigned from his job at Hewlett Packard and devoted himself to her training, sponsorships, and well-being. Joanne won the Hawaiian Ironman Triathlon in 1985.

For his 50th birthday, Jim’s gift to himself was 18 months of training for an attempt to climb El Capitan in fewer than 24 hours. Jim made it to the top. In 1995, he founded a management laboratory in Boulder, Colorado, where he conducts research and engages with CEOs and senior leadership teams. Jim is also a Socratic advisor to leaders in the business and social sectors and, according to Forbes (2017), he is one of the “100 Greatest Living Business Minds.”

One of Jim’s most foundational concepts is “First Who, Then What.” He discovered great leaders who build organizations from the people up. He described it as “getting the right people on the bus” and making sure those people are in the key seats before you figure out where you are going to drive. Business is unpredictable. You can’t possibly know what challenges you are going to face, but you can know that your team can handle anything while adapting and continuing to perform at their peak under any circumstances.

Collins is right. The right person in your business can be a transformational game-changer, and the wrong person can cause you endless misery. The biggest failures in my life can be traced back to one simple decision: allowing the wrong person on my bus.

Unfortunately, there is no way to learn how to bring the right people into your life without failing with the wrong people first. Once you learn who is right for you, your friends, your organization and your career, give them the respect of their own freedom. They are critically important to you, and you must treat them with utmost care.

In business, hire people who are smarter than you, more talented than you, and then get the heck out of their way. If you hire the second best instead of the best or a “C” player instead of an “A” player, you are going to get your butt handed to you on a silver platter.

If I had hired better people to help with government relations, I wouldn’t be writing this book. I had a VP of compliance. I had a consultant. I had a head of government relations. I had a general counsel. I had outside counsel. But I didn’t have the right people on my team. None of these people ever gave me even the slightest warning something might have been amiss. A better team would have done better.

On the flip side, I have seen how the right business leader can transform a money-losing business into one of the most successful businesses. I bought Beckett Collectibles in 2008 and went through two CEOs to find the right one. At the time, it was losing millions of dollars a year. Today, it makes more than 10 million dollars a year. Had I not persisted in finding the right leader for Beckett, the business would likely have died.

This lesson applies to every relationship in your life—your love life, your spouse, your friends, your business associates, your partners, your co-workers, your lawyer, and your accountant. Just one wrong person on your bus in any one of these areas can mean the difference between misery and a beautiful and rewarding life.

Napoleon Hill’s Think and Grow Rich is my all-time favorite book. I must have listened to it on tape more than 1,000 times. Early in my career, it helped me set and achieve my goals and find my burning desire . Hill believes the art of success is simply setting an objective and turning it into a burning desire, with daily focus on the goal. Business and success are by-products of setting a goal and achieving it. It could be a goal to lose weight or to fast 22 hours a day. It could be a goal to raise a family, a goal to climb a mountain, master electric car repair or to live off the grid for a year with your family.

The core of your character is your ability to tell yourself you’re going to do something—and then do it. That is the agreement we make with ourselves. That is internal integrity. For me, that is what success means. “I said I was going to do it, and I did it.” Your free will depends on it.

I said I was going to build a billion-dollar business. I said I was going to get into the insurance business. I said I was going to do acquisitions. I said I did nothing wrong with my campaign donations, and I intend to win my case, regardless of how long it takes. I made a commitment to myself and a commitment to other people. Your ability to keep your own word is the core of your character.

This was perhaps Hill’s greatest advice: “In every adversity, there are the seeds of even greater advantage.” I have seen the power of this firsthand.

My indictment and trial have together been the most powerful learning experience. I wouldn’t give it up for anything. My education in the School of Hard Knocks has been priceless. You can’t buy this kind of education anywhere at any price. You have to go through it. You have to live it.

Humans have three responses to adversity: It makes us weaker, it has no impact, or it makes us stronger. Thankfully, thanks to my parents, adversity and failures make me stronger. The more intense the adversity, the greater the strength. Napoleon Hill understood this, too. His son was born deaf. He kept telling his son, “This is an advantage. You’re deaf; it’s got to be an advantage.” He had no idea how being deaf was going to turn into an advantage for his son; he just knew it would. His son later built a successful hearing aid company.

Ray Charles faced similar adversity. He was born poor and black in the Jim Crow South. He lost his eyesight by age 7. His father abandoned his family. Despite these challenges, Charles became one of the greatest modern musicians. He turned his lack of sight into a greater advantage of mastering sound.

You’ve got to keep looking for the advantage in adversity because, at first, you won’t see it. It might take years to emerge. But emerge it will, if you persist long enough. After the indictment, we found a new chairman, a new legal team, and a new CFO. We discovered wonderful new leaders. Our team is more disciplined and more focused than ever. I have had an amazing education about the machinations of politics and law enforcement in the United States. I have a new passion for helping people who don’t have the means to fight injustice. There are all kinds of advantages coming from this adversity. The light of this advantage is very clear to me. It’s coming straight at me.