26-Aug-02

From Dan Peña – Executive Coach and Mentor to the High Performer.

Dear Friend and Subscriber,

From time to time I see something in the news that really moves me! Sometimes the news is positive and often it is negative.

Below is such an article from the Financial Times – arguably the best financial newspaper in the world. I am not suggesting you follow its precepts. You may not even be aware such programs exist.

When people ask me "when did I get motivated?", I tell them "When I decided not to stay in the military and went back to university".

I can assure you where I was raised and went to school, as a child, what is described in the article wasn’t even a dream. My summers weren’t spent "at the shore" – they were spent in the streets!

It is a long article but in my opinion worth it. For those of you that have young children it’s not too late!

To Your Quantum Leap
Dan Peña, Sr

P.S. I said I would give you short letters in the future – not short attachments. I apologise!

Little earners
By Jonathan Green
Financial Times

Devon Green, the slim, glamorous CEO of a Florida recycling company, waits for her morning conference call. She sighs, pushing her palms down her body and smoothing any crinkles from her blue-hooped dress as she pops open her compact to apply Max Factor Legendary Lavender lipstick. The speakerphone crackles into life with the voice of David A. Henwood, chief investment officer for investment consultants Raymond James, for 30 years one of the East Coast’s foremost equity analysts.

The call over, Devon strides purposefully from one of the conference rooms in the bowels of the $400-a-night, five-star Ritz Carlton hotel. As she passes the Wall Street Journals, arrayed on cabinet tops in the corridor, they only confirm what she already knows – her unit trusts have dropped drastically in value. With expensively scented air conditioning in her nostrils, she heads for the lobby up the broad stairs, past prints of English country scenes and her brow begins to furrow. This may be Florida, and one of the richest sections of beach in the world, home to America’s old money and a playground for the super-rich, but Devon has business in mind.

She reaches the lobby and her business partner Jesse, comfortably ensconced in a high-backed armchair. Devon grabs Jesse’s wrists and swings her round, Jesse’s feet leaving the floor and her body revolving in a blur – turning five, six, seven times. "You’ve crossed the line once too often," she says indignantly to Jesse, who has gone porcelain-white and is so giddy that her eyes are still revolving.

Devon then turns to me. "See, I’m a regular kid when I’m with my friends or my sister and then I turn the switch and I’m a businesswoman." She flashes a winning grin at an astonished waiter, who thought Jesse’s whirling feet were about to send his trolleyful of chocolate cakes flying. Devon Green, founder and CEO of recycling company Devon’s Heal the World, is 11 years old. Her business partner and sister Jesse is five.

And today Devon has just taken one of her first classes in investing in today’s bear market. Both she and her sister are here in the sumptuous grounds of the Palm Beach Ritz Carlton, with its money-drenched atmosphere, for the Kids Money Camp 2002. Parents from all over the US have stumped up about $950 (�620) for the camp, and the chintz splendour of the hotel’s rooms, for their kids so they can learn about stock market indices, the "power of compounding – rule of 72", money mergers, stocks, bonds and unit trusts. And while other parents send their kids to toast marshmallows over campfires, sing songs and make origami donkeys by Lake Michigan, the parents sending their offspring here are millionaires – billionaires, even – and they expect their children to behave in a way commensurable with the fortunes they have accrued.

Leading the happy campers is Susan Bradley, a self-styled financial guru with a lacquered hairstyle and a glossy manner to match. A redoubtable woman, she is well known around the palm-fronded mansions of Palm Beach for her Sudden Money Institute, dedicated to coping with the pressures of wealth. She has been running the camps for five years in a town obsessed with money. Because, aside from the cavernous mansions in the area owned by Don King, Jim Clark of Netscape and Si Newhouse of Cond� Nast, Florida has no state income tax and it is also legal to file for bankruptcy and still keep your property. Thus, the local paper in Palm Beach often reports cases of sequestered wealth, insider trading deals and migrants in their droves scurrying for sanctuary from the fast-collapsing world of corporate America. So much so that the population around Palm Beach has doubled recently. Bradley’s motivation for her summer camp is clear: "Money is the most powerful force on the planet," she says with her slight lisp, before adding warily, "aside from religion."

This year there are 13 kids at the camp, ranging in age from 11 to 19 (Jesse is still too young to join her sister). Swishing into the hotel’s driveway in a Mercedes C230 and pushing his Mont Blanc pen into his top pocket, is 16-year-old Paul Lambert. "This is the most exciting thing I have done all summer," he says breathlessly. "I want to be a CEO when I get older. Yes, the money and power are the draw," he nods, handing the keys to the valet. But what about Enron, WorldCom and the tawdry scandals which have robbed people of their life’s savings? "Bad accounting," he says.

On his third money camp since the age of 12, is the aptly named Cash. "I was not named after money," he says, somewhat irritably. "My dad’s an entrepreneur and named me after the James Garner character Cash McCall in the film [of the same name] who was an entrepreneur, always looking for the next business opportunity – my dad said if he ever had a kid, that’s what he’d call him."

But ask Cash about the speakers at the camp and he is almost breathless with excitement at the prospect of talks from stripy-shirted, braces-wearing brokers, investment managers and heads of corporate departments. "Where else could you get to speak to the top people from the biggest capitalist economy in the world?" he says excitedly. "It’s like going to basketball camp and Michael Jordan is there."

Cash, who goes to the English public school Stonyhurst and has homes in Ascot and Palm Beach, is wary of the press, though. "When I was younger I used to love to tell a story about a friend of my dad’s who built up a company, put it in his girlfriend’s name and then bankrupted it," says the 16-year-old. "I was interviewed and they jumped on that, which I thought was unfair. I just wanted to be like my dad."

Susan Bradley opens the three-day camp with a fiery introduction on the importance of money. Each child is given her book,

Sudden Money – Managing a Financial Windfall and a neat little mound of baseball hats, T-shirts, teddy bears and golf nick-nacks, all emblazoned with corporate sponsors. "These people want their logo in front of you because you’re the future," she intones. "But why is money important? When you speak with your friends about it are there some people who think, y’know, you’re a better person if you don’t have any?" Some of the kids nod, in memory of those who don’t place such a reliance on fiscal success. Bradley continues: "But is there anything that doesn’t have anything to do with money?" The kids shake their heads. "Noooooo, that’s right!" says Bradley with a whoop.

Over the next few days they are taken through conference calls and lectures and put through various exercises while being cajoled into answering questions from Bradley, who throws out more complimentary corporate merchandise for the correct answer.

The star of the camp is undoubtedly Devon, who even gives a talk to the rest of the kids as part of the syllabus. She started her can-recycling business at the age of seven, when her neighbour gave her some cans to take to the dump after a party. Since then Devon has expanded it into a thriving concern – while coyly remaining silent about its size – donating 30 per cent of her profits to charity and 20 per cent as gifts to friends and relatives. The remaining 50 per cent is fed into her bank account and a nice mutual fund she has had going for a few years.

She’s a star in Florida, winning a litany of charitable awards – such as the Miss Pre-Teen America Scholarship and the Humane Society of the Treasure Coast’s Chocolate Festival top fundraiser and volunteer – through to being, incredibly, a member of the Palm City Chamber of Commerce along with bankers, lawyers and local businessmen. Local businessmen talk about her with awe and at local fundraising dinners love to recount the story of how Devon was at one of the Chambers business functions and was talking to a possible contact but ran out of her business cards. She asked him to wait, telling him that she wanted to give him her card, left and, thinking she was out of his eyeline, hopped, skipped and jumped – missing all the cracks in the flagstones on the floor – to a table where her cards were. She then calmly picked up her cards, jumped round and gracefully walked back, handing over a card with a flawless, corporate grin.

Her speech may be rehearsed to a T, but it’s engaging. And when there aren’t any volunteers from the entire room of kids, stockbrokers in black braces and other adults, to come to the front and hold a magnet against various metallic objects to demonstrate that anything magnetic cannot be recycled, Devon taps her feet, examines her finger nails and says baldly: "I wanna see a show of hands next time." And when she ends with: "I may be one person, but I am one person who can make a difference", the other campers swallow hard while clapping.

Balancing Jesse on his knee and holding a camcorder to his eye throughout the entire event is Devon’s dad, Michael, undoubtedly her �minence grise. One feels he was largely responsible for her website and business name, Devon’s Heal the World. He smiles fondly at her as she gives him a proprietorial wink while doing her speech. "She learnt how to make money at an early age," he says, grinning. "But I’ve seen her turn that switch – one minute she’s the young ambassador, the young businesswoman and then she’s back to being a kid.

"If she ends up as a leader of a large business, well . . . " And he’s lost in reverie, dreaming of the future. But snapping out of it, and keen to emphasise his daughter’s charitable streak as well as her money-making potential, he adds hurriedly: "But if she had to close a plant or something because it was unprofitable, she would find jobs for everyone there."

That said, Devon seems rather taken with a speech by Sharon MacDonald, former director of mergers and acquisitions manager at Renaissance World Wide, a leading provider of information technology services. As the kids sit wide-eyed, MacDonald details her meteoric and ruthless ascent of the corporate tree in New York, talking about the Pac-man theory, and how when she goes into companies to position for resale she "cuts out all the dead wood". Devon listens intently.

Afterwards the kids are told to form groups and draw up a list of a short-term goal and a long-term goal and how both can be achieved financially. One group comes up with buying a Gucci handbag, the next two buying cars and Devon wants to buy a little dog for $500, which everyone oohs and aahs about. Yet her long-term goal, it transpires, inspired by MacDonald’s talk, is to go one stage further. She intends to buy out and own the pet shop within five years of buying her little dog. What happens if the owner loves his shop and doesn’t want to sell? "Then there would be a hostile takeover," she says rather brusquely, while working on the figures.

Bradley is keen to play down this sort of attitude and there is a large part of the course devoted to philanthropy. Many of the kids here are so rich that they will give millions away for tax breaks, and, they claim, to help those less fortunate than themselves. There is a talk by Phil Flynn, of Philanthropic Focus, an organisation that specialises in setting up family foundations to help wealthy families give in the right way.

The kids are asked to read USA Today and say what charity they would give money to and why. Devon decides on setting up a charity for victims of West Bank violence. "We’d give money to families who have lost loved ones," she says, with a warm grin, but then thinks again. "But we’d probably give more if they lost a father, y’know, someone who was bringing in a decent income, than if they lost a sister or something." She thinks a little further. "Not that they are not important family members but, well, they don’t earn as much."

With corporate America busy cleaning up its image, many of the kids from wealthy backgrounds are already fluent in the emollient language of charity. Dave and Becky Serwitz, 16 and 19, from California, are accompanied throughout the entire camp by their parents Marshall and BJ.

As the family wrestles, japes and shows how loving they are, holding forth at every Money Camp event, the other kids can only look on and feel slightly dysfunctional that their families aren’t the same.

The Serwitzes are a huge extended family and have four other siblings, all away on other camps. "When people ask why we have such a large family they say we must either be Catholic, Mormon or stupid," says dad. The children all grin, as does mom. "Well, we’re not Catholic or Mormon." And with that the whole family breaks into raucous laughter. Marshall is a financial adviser, dealing with Californians who have a minimum of $3m to invest. He sits at the back of all the talks at the money camp either nodding his head in agreement or contradicting what the speakers say. Every year he gives his children $300 to donate and each year the family will call in representatives from notable charities who have to give a talk in front of his kids to prove why they should get the money – then the family all decide who is given the money. Last year it was Dave’s college wrestling team. "Well, that’s a worthy cause isn’t it?" he says with a grin. "They really gave me something."

Like other parents, Marshall has sent his kids here to acquire one of life’s most important skills. "If you are just a little bit financially literate and start from an early age, that can make a huge difference over a lifetime," he says, proudly. Although in quieter moments the kids are not quite so enamoured. "There’s no way I would tell my friends I had been here," says Becky. "I’d never hear the end of it."

As the camp draws to a close, Susan Bradley is upbeat. She plans to market the camp – in only its fifth year – worldwide, seeing herself as a fiscal messiah, the Pied Piper of Lucre. "I am ready to expand this as a global business," she says. And mergers and acquisitions supremo Sharon Macdonald is eager to be involved: "Yes, Sharon has shown great interest."

But isn’t there a caveat here? Shouldn’t children just be children and only have to suffer the horrors of money management when they are older? "That’s an attitude we get from the British press all the time," says Bradley. "Money is not a good or bad thing – it’s a fact of life. I mean, where else are these kids gonna get this type of knowledge? It’s a crucial life skill."

But Devon Green – her glossy PR faltering slightly and the needs of an 11-year-old taking over – seems somewhat pleased it has ended. "Dad, can we go to the beach now?" she implores. No, he says, it’s a long drive back up state to where they live. It seems even those who have to heal the world can’t get time off these days.

To Your Quantum Leap

Dan Peña, Sr