How a Home Building Founder Built His Legacy on Being ‘Unreasonable’

Eli Broad died last week, leaving behind memories of an “unreasonable,” yet beloved, risk taking billionaire behind the home building giant KB Home. Broad found success in financial services as well, but it was his work with KB Home that left an impact on the city of Los Angeles. The Los Angeles Times says Broad had a reputation for being difficult, but it only came as a result of high standards, and even he believed being unreasonable was the foundation of his success. Broad’s first success came in the late 1950s when he opted out of constructing homes with basements. Though unheard of at the time, it made more homes affordable to growing families.

Broad came to find that some of the best ideas sprang from young talent, writing in his memoir that he often preferred to hire youth over more experienced candidates. “We captured bright young talent, listened to new ideas and — when they made sense — ran with them,” Broad wrote. In many ways, he predated Silicon Valley’s innovation mantra, something that wasn’t always easy on those young employees.

“I used to joke around and say that if you achieved 90% of a goal that he had set for you, it was the equivalent of achieving 150% of a goal another reasonable person would have set,” said Oaktree Capital Management CEO Jay Wintrob, 64, who worked for Broad at SunAmerica.

SunAmerica had its roots in Sun Life, an old-line insurer Broad had acquired to hedge his volatile home-building business. It was transformed into a financial powerhouse by introducing variable- and fixed-rate annuities, which Broad called “mutual funds in life insurance wrappers.” The idea was such a success SunAmerica was acquired for $18 billion by insurer AIG in 1998.

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