America’s favorite crazy uncle H. Ross Perot died last month. Mr. Perot was best known for his colorful phrases. The movement of U.S. jobs to Mexico, he said, created a “giant sucking sound.” During his unsuccessful 1992 presidential campaign, he derided negative campaigning by proclaiming, “Let’s get off mud wrestling.” On getting things done in Washington, he said, “Don’t just sit here slow dancing.” According to the Associated Press, “Mr. Perot spent his own money during the campaign on 30-minute television spots during which he used charts and graphs to make his points, summarizing them with a line that became a national catchphrase: ‘It’s just that simple.’”
Mr. Perot was quirky but also was a savvy businessperson. While working at IBM, he observed how inefficiently Big Blue’s customers were using their expensive systems. He then founded Electronic Data Systems (EDS) which was a pioneer in facilities management. EDS became the Information Technology department for many small companies, including many credit unions, to run their own system in-house. EDS also provided early support for both Medicaid and Medicare in his home state of Texas. What is most impressive is that he was able to expand company revenues and build a profitable business with no debt.
After Mr. Perot retired, EDS continued to expand, especially internationally. As is the case with most high tech companies, pieces of EDS were bought and sold several times to the point that the original company is no longer recognizable. When he originally sold EDS to General Motors, he repeatedly clashed publicly with GM CEO Roger Smith about GM’s outdated business model. Specifically, he called a plan from GM to close plants and lay off workers “morally wrong.” Mr. Perot commented that, “At EDS when we saw a snake we kill it. At GM they appoint a committee to study snakes.” GM eventually paid Mr. Perot $700 million to leave the company.
But he wasn’t finished. He founded Perot Systems which did much the same function as EDS and built it into another profitable company with no debt. Perot Systems was sold to Dell Computer, and Mr. Perot went on to more philanthropic endeavors.
USA Today summarized Mr. Perot’s three tenets that he lived by that helped him achieve success: (1) Don’t make money your primary goal – Focus on being the best, and financial success will come as a byproduct; (2) Prioritize family over business – Give your children your full and undivided attention; and (3) Establish a high spirit of mutual trust with subordinates, peers, and superiors.
Mr. Perot believed taxes should be increased on the wealthy, while spending should be cut to help pay off the national debt. He also advocated for a higher capital gains tax and tax breaks for new business owners. His views were contrary to most corporate CEOs with the notable exception of Warren Buffett who has done pretty well for himself. He truly was an independent thinker not bound by the Democratic or Republican Party labels. His parting words in his last interview were, “Texas born. Texas bred. When I die, I’ll be Texas dead.” Crazy Uncle Ross will be missed.