Business Ideas - 3 Business Lessons From Gerry Schwartz

Hi, I'm Evan Carmichael, and welcome to another edition of Modeling the Masters. I believe that the fastest and most effective way to grow your business is to model the strategies of people who've already done what you're trying to do. So today we're going to look at how a young man whose early ambition was to be earning $10,000 a year went on to become a billionaire and one of Canada's wealthiest entrepreneurs. This is the story of Gerry Schwartz and the top 3 lessons that you can learn from his success.

Jerry Schwartz is a Canadian businessman. In 1977, he co-founded CanWest Global Communications, followed by Onyx in 1983. The Report on Business ranked Schwartz as one of the 30 wealthiest Canadians with a net worth that exceeds $1.5 billion. In high school, he said he wanted to be an executive and to have a big job that would pay at least $10,000 a year. "I thought $10,000 was a big deal," he said. He learned about business from his father. According to Schwartz, "I can't remember a day growing up without my father talking to me about business. If he bought real estate, he'd explain how and why." Today his investment firm Onyx has over 235,000 employees and Schwartz continues to look for opportunities to buy struggling companies, turn them around, and sell them for a handsome profit. He was named Ernst Young's 2005 Entrepreneur of the Year and was also made an Officer of the Order of Canada in 2006.

By listening to his father's advice and by keeping his eye open for opportunities, Gerry Schwartz was able to become a billionaire. To help you find your opportunities, here are 3 action items you can learn from Gerry Schwartz.

Action Item #1: Keep your team together. If you want to grow your business, it's important not only to find good people to work for you, but also to keep them on board. High employee turnover hurts productivity and morale and will limit how far your company can go. People love working for Jerry Schwartz because he gives them opportunities and respects their opinions. Every Monday morning, Schwartz gathers his top executives and decision-makers in the Onyx boardroom to discuss the merits of transactions and strategies, both new and old. If one of his key team players is unable to be at the meeting in person, Schwartz makes sure they are brought in by telephone. One by one, Schwartz goes around the table and lets each and every one of his staff have their say about the future direction of the company, and they do not have to go along with whatever Schwartz proposes. If one person raises a doubt about a proposal on the table, the team may still proceed but with greater caution. If two executives raise their dissenting voices, then the deal is dropped right then and there. According to Schwartz, Collectively, we make Onyx a dynamic and collegial place to work. One of the hallmarks of Onyx is that since I started the company in 1983, every professional who has joined the company at our Toronto head office is still here. We've had no turnover. Action Item #2: Take risks. Being an entrepreneur involves taking risks. You're often venturing out into the unknown, and you have to be willing to take that leap of faith even when you don't have all the information or resources that you might need to be successful. There's no such thing as high returns without risk, and among investment bankers, Schwartz has gained a reputation for being willing to stick his neck out and take that risk. He continues going for the long shots, for companies that others haven't thought about acquiring. And if the deal doesn't work out, Schwartz says he takes it personally, but he dusts himself off and comes back again for another try. According to Schwartz, "I'm still a long distance from smart, but I'm also a long distance from dumb. The hardest lesson that I've learned has been not to repeat the dumb mistakes I've made over the years, which are too numerous to list." Action Item #3: Look for new opportunities. Business growth always comes from seizing new opportunities. As they come up around you, you'll have to make tough decisions if you should pursue the opportunities or not. Make sure you take the time to really think about it and if it's going to work out instead of jumping on board every opportunity that comes by. Over his long career, Schwartz has come to recognize that there will always be another deal. Success, however, only comes from investing in the ones that he's really researched and dug down deep to make sure that it's a good deal. Because of his reputation, Onyx is now informed whenever any major company comes up for sale and anywhere in North America. Schwartz and his team then inspect the books of each company and their respective markets to see if it's worth buying. Schwartz is also keen on finding his own potential acquisitions, ones that have yet to be advertised and that are hiding within a larger parent company. According to Schwartz, every decision Onyx makes is made on the basis of creating long-term value. Our philosophy is to operate like a forever owner of an asset. We take an excruciating length of time to buy an asset. We did nothing in the late 1980s because of all the We don't feel pressure to do deals. That's not our game. Investments are like trains, and if you miss one, don't worry, because another one will come down the line.

So remember, keep your team together, take risks, and look for new opportunities. To finish up this video, I wanted to share one of my favorite true stories about Jerry Schwartz and some of his best quotes.

In 1969, when Schwartz was pursuing his MBA at Harvard, the school was offering an introductory course on computers. It was a popular course, but Schwartz didn't sign up for it. According to Schwartz, "I thought I'd have assistants to do that stuff for me, which is why I missed the value of the digital era in so many ways. You can't understand the power of technology unless you use it." Schwartz might have missed out on the computer course at Harvard, but what he calls his "ridiculous attitude towards computers" changed after a trip to Bill Gates' house. "He gave me a Palm Pilot. I got on a plane from Seattle to Florida, a 5-hour flight." and started on the instruction book. I couldn't figure it out. By the time Schwartz had landed back home, he was only on section 3 of 15 in the instruction manual. I said, "That's it," recalled Schwartz. "I decided to learn. From that day forward, I've insisted Onyx be on the leading edge of information technology." Thank you for joining me for another edition of Modern Masters.

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