Norm Brodsky is a successful businessman who in 2007 sold his document archive business, CitiStorage, for $110 million. But if you pick up a copy of Inc. magazine, where Brodsky has a popular monthly column, you are more likely to read about his failures than his triumphs.
That’s because Brodsky believes failure is a great learning opportunity, if you are mature enough to take advantage of it. CitiStorage was built partly on the lessons Brodsky learned when his first company, Perfect Courier, went belly-up in 1987. “I built it up from zero to 120 million in eight years, and from 120 million to zero in eight months.” he says. “I could have blamed it on the stock market crash, or the advent of the fax machine that came along.”
Instead of blaming the defeat on external factors, Brodsky focused on his own decisions, seeing where he went wrong. He realized the company would have weathered the storm had Brodsky not decided to leverage it so heavily. It was a hard lesson learned, but one that proved useful when he re-entered the business world determined not to repeat the same mistakes.
“I do write a lot about failure,” he says. “Not so much now, but early on, and if you go outside the U.S., you find that failure was a very negative thing, and a lot of people couldn’t come back from it and they felt embarrassed. I think failure builds you to be successful if you take responsibility for the failure. You’ll find a lot of businessmen have been through failures in their lives and in their business lives. The ones who are able to survive and come back are the ones who take lessons from their failures.”
Business leaders and aspiring entrepreneurs alike can benefit from Brodsky’s mistakes and other insights at the New Jersey Entrepreneurs Network meeting on Wednesday, October 2, from 6:30 to 9:30 p.m. at Johnson & Johnson world headquarters in New Brunswick. Cost: $45 before September 27, $55 at the door. Register at njen.com.
“Every time there’s a failure in your life, I almost guarantee you that you have some responsibility for it. If you can find that and not blame it on outside forces, you can learn from it,” Brodsky says. Otherwise, you end up repeating the same mistakes over and over.
Brodsky describes his own rise in the business world as a process of learning from large and small mistakes, improving a little bit each time. “There are two types of people in this world: smart people, and wise people. Unfortunately, I’m ‘smart,’ and I define that as people who learn from their own mistakes. People who are wise can learn from the mistakes of others. Hopefully, if you read some of the things that I’ve written about, you can become wise and not have to go through the same mistakes I’ve gone through.”
His roots in business go back to his childhood on Long Island, where his father was a custom peddler; a kind of door-to-door salesman who sold household goods to residents of middle-class neighborhoods. Brodsky says he learned a lot about business from watching his father work. “He took me to work with him on the weekends when I was young. I would say, ‘How does this work?’ and he would say, ‘Well, you buy something for a dollar and you sell it for two dollars.’ Today we know that as ‘big margins.’ He had a pretty good feel for the basics of business.”
Brodsky’s father died at the age of 52, when Brodsky was young. He went on to study accounting at Rider College. His mother, who had been a housewife up to that point, started reading Brodsky’s textbooks, and decided to become a bookkeeper herself. Brodsky, on the other hand, decided to go into law, earning a degree at Brooklyn Law School.
He practiced law for a few years, but found himself yearning for more excitement. “I didn’t really love it,” he says of his time as a lawyer. “I was the rainmaker. I brought clients in because I sold. I loved to sell, and I couldn’t face the rest of my life practicing law. That’s what really drove me to go into business.”
Somewhere along the way in his business career, Brodsky developed a habit of giving advice, one which would ultimately lead him to become a kind of Ann Landers of the business world, publishing four books on business, writing his column and other articles for Inc., and speaking all around the country in addition to running several businesses. His advice has covered hiring, bringing on partners, accounting practices, dealing with taxes, and many other subjects. He even has advice about taking advice (more on that later.)
Brodsky says that due to his high profile, he has anywhere from 75 to 100 people contact him every day with some business-related problem. He welcomes it, and says he meets with two or three people every day to mentor them or advise them, sometimes on a continuing basis, and always for free. “Business is my hobby. I love meeting people every day to work with them and tutor,” he says.
Brodsky never set out to become a writer. His gig at Inc. began in a roundabout way. In the early 1980s, his courier company had made Inc.’s list of the fastest growing companies, and he was invited to a conference with other award winners. The conference included a workshop led by another business owner, one which Brodsky disrupted by asking critical questions. Afterward, the annoyed host asked Brodsky if he thought he could do better, and he replied, “Yes.” The next year, when his company was once again on the list, he was invited to make his own presentation, and he did. That got Inc.’s attention. The magazine found out about his habit of mentoring other business owners, and they decided to write an article about him. Brodsky demanded to write the article himself. “They said, ‘You can’t write.’” he recalls “I said, ‘You don’t know what I can do and what I can’t do.’”
They declined, but did agree to let him review it before it went to print. The article was so well received, they decided to offer him an every-other-month column. That column has since become a monthly affair and a regular part of the magazine since 1995.
Sometimes Brodsky’s column is a direct response to a business person’s questions. Other times, he writes about what is on his mind because of his own ongoing business ventures (He is trying to launch a chain of restaurants, and has built three hotels in North Dakota to cater to oil workers.)
Some of those columns have had a major influence on the business world. When Brodsky wrote about how a paper shredder business was easy to get into, with low startup costs, he says 200 people wrote back to say they had started their own ventures because they were inspired by his column.
When he wrote about North Dakota being the next “gold rush” due to the energy boom, he says at least 30 people had contacted him to say they had started businesses there. “And if I know of 30, that means there might be 60, or 90, or 200 or 1,000,” he says.
He believes his most important column to date is one in which he advised readers to create a written “life plan” as well as a business plan, and to make sure the two are in synch. That’s because for Brodsky, business is not merely about making money. The column in question stemmed from a young businessman with three children asking for advice on turning his small enterprise into a larger business that would generate $20 million a year. Brodsky responded by asking him why he wanted that. The man responded that he wanted to provide a bigger house and to be able to take more time off. Brodsky told the man to ask his wife what she wanted. Weeks later, he got back to Brodsky, saying his wife wanted a big house and more money also, but that she felt it was more important for the husband to be around while his kids were growing up than it was to be rich.
Brodsky told the man that if he wanted to grow his business to $20 million a year, he would never be around for his family. Instead, he advised him to stick to a more modest plan of shooting for $5 million-a-year revenues that would allow him to go home more often. In that case, it paid off for the business owner to examine what he wanted out of life rather than just what he wanted out of his business, and to make sure the two were working towards the same goal.
“Afterwards, I talked to my wife and said, ‘You have to practice what you preach,’” Brodsky recalls. That was about 10 years ago, and ever since, the 71-year-old Brodsky has come up with a new five-year life plan every year. One of his earlier plans set the goal of taking 16 weeks off every year. Reaching that goal took years of work getting his businesses to the point where he could delegate enough responsibility to be able to leave things in good hands, but it was worth it when he took a four-week trip to Israel one summer.
Currently, Brodsky’s life plan includes continuing to travel, visiting at least two countries a year, “unwinding” his businesses, staying healthy, losing weight and spending some time fishing. Brodsky has been married for 44 years and has two daughters and one granddaughter.
In addition to practicing what he preaches, there are a number of people Brodsky turns to when he himself needs advice, most of whom are also well-known business writers. Jack Stack, the author of “The Great Game of Business,” is one of them, along with business guru Ari Weinzweig.
Brodsky says a lot of business people turn to him or others for advice because running a company can be a lonely thing, especially when it is just starting out. “They have absolutely nobody to talk to,” he says. “They can’t really tell their true feelings to their employees, or even their executive team, because of the fact that it may disrupt what they are doing.”
When Brodsky asks for advice, and gets it, he doesn’t always follow it, but he always takes it seriously. “You know the business better. You’re in the business, and your gut feeling is better. If you don’t take the advice I give, that’s OK. I won’t be offended. But if you don’t think about it and mull it over before you make a decision, you’re a fool.” Just as foolish is following blindly the advice of a consultant or mentor. “What happens is, a lot of people who go for advice or who pay for advice, find it necessary to take that advice no matter what. Afterward, if something goes wrong, they blame the consultant or the outside person. If you think about it, it’s your decision, and if something goes wrong, you take responsibility for it.”
For Brodsky, the hardest part about being a business person is that so many other people will live through the consequences of his decisions. If there is a consistent thread in Brodsky’s columns, it is a persistent urging of business leaders to be compassionate towards their employees. “The most important people in a company are employees,” he says. “The saying used to be, the ‘customer’s always right.’ That’s not true. The customer is not always right, and you have to have the back of your employees.”
Brodsky is keenly aware of the power he, as a business owner, has over other people’s lives. “Decisions affecting people’s lives are very difficult to make,” he says. “You feel responsibility for the people who are working for you. You control their lives, what they get paid, the hours they work, and how they are treated for a good part of the day.” That’s why the hardest decision he ever had to make was to cut his losses and shut down Perfect Courier 26 years ago.
“It cost thousands of people their jobs,” he says. “I swore to myself I would never let that happen again.” And it didn’t. When it came time to sell CitiStorage in 2007, Brodsky had the choice of whom to sell it to. The most lucrative offer came from a strategic partner, another player in the business that was ready to go with its own infrastructure. He knew that this company was offering more money because they would be able to save overhead by purchasing his company and letting go many of the administrative staff. His other choice was to sell it to an outside entity that was going to run the business mostly as it was. Brodsky says he estimates he sold it for about $20 million less because he went with the second option, the one that spared his employees.
“I was getting enough money anyway, and I wanted to have the best impact for my employees,” he says.
Brodsky spends a lot of time thinking about the future, and trends that people might be able to capitalize on. At the moment, he sees two major movements that will have a large impact on business. The first is that he sees young people favoring living in the city versus the suburbs, where their parents and grandparents aspired to live. “People want a sense of neighborhood, and a sense of being close by to conveniences,” he says. The second is that many of the people coming to him for advice are also working full-time jobs. Their businesses are things they can run from a computer, to supplement their standard of living. They aren’t putting all their eggs in one basket.
“It used to be that you went out and raised money from relatives, you quit your job, and you started your business. You had a lot at stake and you created jobs. Even if things got tough, you had to stay in there.” The part-timers, he says, hardly create any jobs, and that is one reason he believes unemployment remains stubbornly high.
One thing is sure: even as society changes, Brodsky will be trying to figure out how to fit in. When Brodsky got into business, computers were very rare. Only universities had them, and Brodsky wasn’t interested. Today, Brodsky has traded a desk for a tablet computer and never wants to go back. “If I can’t run it from an iPad, I’m not interested,” he says.