Henry Kravis Interview (page: 3 / 5) Financier and Investor	Print Interview

But make a commitment to do something. You have a vision? Fine. Its not going to be a straight road to the goal line. Its going to be a lot of zigs and zags, and you know, throwing for some losses. I say to my children, "Be on that field. Don't sit on the sidelines and focus on what other people are doing. And don't be on that side line putting your leg out trying to trip the runner as he comes down the side. You get on that field and you play, and you wear the same uniform, and you get banged up just like everybody else. And then you are going to know what it's like." It's easier to criticize. Anybody can criticize. But you get on that field, and you play, and you are going to have a totally different respect for yourself, and a different sense of worth. very important to do that.

Get the Flash Player to see this video. I tell my children, "Don't worry about what the other person is doing." A lot of people are always worried about what somebody else is doing. I love people to worry about what I'm doing. People seem to know more about what I'm doing than I know about what I'm doing. I hear it all the time. I guess as you get luckier, and a little more successful, you hear a little more of that. I just quit worrying about what other people are doing. Because if you are worrying about what other people are doing, you are not doing anything yourself. You're on the sideline, and you are just watching. You need to know what your competition is doing, you need to know what the environment is like, but don't dwell on what other people are doing. I love people who dwell on what I'm doing, particularly if they are in our field. Because I'm out there behind the wheel driving along, and they are trying to catch up, and that's great.

Someone who is in your position is subject to criticism. What you do is often questioned. How do you handle criticism?

Henry Kravis: At first not very well. I took everything very personally. I'd read every word. Finally, I said, "Most people don't remember what they've read to begin with. They only remember a trend. As long as you are honest, and as long as you are reasonably successful, they will remember that." I remember someone called me one day, right after the heat of battle at RJR. We were getting beaten up pretty badly, in the press, because the other side had really gone after us, planting all these stories. We had always taken an attitude of not talking to the press. We just said, "Look, our record speaks for itself, and we will just let it stand." I think that was probably a mistake in RJR, because there was no rebuttal from our side. Pretty soon, people started to believe the other side, and we learned a lot from that. It was very hard. People would tell me, "Forget about it. Day-old newspaper is good to wrap fish in."

Get the Flash Player to see this video. It was hard. It was very hard for me. I want people to like me. You know? I wanted people to like what we did. Because we worked hard at it. It's like any creative person -- you want everybody to feel like you feel about it. Well, not everybody is going to have the same feeling, and so, it was a very hard thing for me to learn to live with.

Today, I've learned to try to educate a few good reporters. If I've got a few good reporters that really understand what we do, as opposed to pulling something that was wrong out of a computer, and then compounding it by writing something more that's wrong. Pretty soon the whole story is all wrong. If we can educate these people, then I'm going to have a fair chance at getting my point across.

But the press hasn't changed. I've gone back and read stories about J.P. Morgan, and how he hated the press. Here was a man that was enormously successful. J.P. Morgan was an incredible financier in his time. People didn't like him. They thought what he was doing was wrong. He was making very large acquisitions, and also bailing out a lot of companies by being the provider of last resources, practically. He lived with it. I'll live with it. Nothing is going to change.

Who were your heroes? Who are your role models?

Henry Kravis: One person that is my role model is my father. I just beam with pride about him. He is now 89 years old. He plays golf all the time, and he's got lots of friends, He's a man who taught me something very important. And that was -- give back to society what you've taken out. I've been really fortunate that way, glad I learned it at a very young age.

Yes, I've been successful, and I've been lucky. Maybe I've made more money than I deserve, but some of the most important moments in my life, and moments that have given me the most pleasure, have been the times that I've been able to make a major contribution in money or time and effort to those less fortunate. Whether it's a drug program that I've started here in New York, with funding from the federal government plus my own money -- and if it works we will roll it out nation-wide -- to being chairman of the public television station here, and being involved in education, which is very important to me. Our future in this country is in educating children. I'm very involved with the arts, whether it be the Metropolitan Museum or the New York City Ballet. I've also been very involved with Central Park, trying to make it more beautiful for the people who live here. It's our 834 acres of green space, we've got to have it for everybody.

My father is my hero because he taught me the joy of giving. The joy of people, of getting to know a lot of people and having binding friendships. That's important.

Another hero, whom of course I've only read about, is Winston Churchill. A real renaissance man, incredible leader, incredible thinker, prolific writer, great orator, artist. Just a wonderful, wonderful man. They don't make them like Winston Churchill any more.

I don't have a lot of role models, per se. I've set my own goals and my own objectives. What's really important to me is that foundation that my mother gave me. That's what I try to live by, as opposed to saying "I want to be like that person." I don't want to be like anybody. I want to be like me. I just like the fact that I can read about these other people, or I have this wonderful input from my father, that enabled me to be the way I am. That's what's important.

I had a teacher who was a great influence on me, when I was in boarding school at Loomis, Jim Wilson. He was my economics teacher and he was also my dorm head. I didn't know what economics was before I took this course. I was really moved by the course, I was moved by him. That's probably one of the reasons I chose the field of business. I enjoyed this course that I had and the challenge he gave me to learn about economics, learn about supply side economics, and demand by the consumer, and wage push, inflation, and so forth.

I saw him last night. Every year, he brings his economics class down to New York, and I give them a dinner after they've spent the day going around to see the investment banks. I talk to them for a couple hours, and let them ask questions, and I really just enjoy doing that. That's another person who had a great influence in my life.

What were you like as a school kid?

Henry Kravis: I wasn't a great student. I was all right. In the courses I liked I did very well. But the courses I didn't really care about, I don't think I did quite as well as my parents probably would have like me to have done. I did very well in the political science classes, very well in the economics and finance courses. I was eager to learn everything that I could.

More importantly, I was eager to apply what I learned. That's why this job at the Madison Fund was so important to me. I look back at how much I really learned as I was on the job. There is no substitute for on-the-job training.

I loved athletics in school. In my boarding school days, I played football, was captain of the wrestling team my last year in high school, and I ran track. I've always been very competitive. The more competition, the happier I am. Just tell me I can't do something, and that's all I need to hear, and I can really get fired up to do it. It's the easier things that maybe I get a little lax on. I always liked the competition at school, I like the competition in sports. I liked the team work. I loved being a member of the team.

If you look at track, and you look at wrestling in particular, they were individual sports, but part of a team. I didn't have to rely on anybody else. Nobody else let me down there. As fast as I was going to be as fast, and I wrestled as well as I could wrestle, and if I lost, that was my own fault, I had nobody to blame but myself. That was something I learned in school. Don't look for excuses, you know? You have nobody to blame but yourself. Don't try to say it was his fault or her fault, because, in the end, you have to be held accountable.

I had a lot of friends in school. I loved friends, I was very social in school, and as I got to college, I probably spent more time going to parties than I probably should have, but it was all part of it. I got out to California, and I loved to play golf. When I was in high school, the school didn't have a golf team, so out at Claremont, I went out for the golf team my freshman year, and I made it. I played four years of competitive golf in Southern California. They elected me captain my last two years, and I loved that challenge, playing 25 to 30 matches a year, and four or five tournaments. I wasn't great, but I was all right. I guess I got down to sort of a one handicap. These kids today are scratch or better. It was a great experience. It was also a humbling experience to play against schools like Southern Cal, and Stanford and UCLA. We played against them every year. Many of those kids went on and turned pro. But being able to beat them sometimes, that was a challenge that I always loved.

Looking back, do you have any favorite books, books that had an impact on you?

Henry Kravis: There was a book called Escape from Freedom, that I read in school. It talks about people thinking they want total freedom, wanting to do whatever they want to do. In reality, people want bounds, people want to be able to hold on to something. They want to know that this is the outer limit. It's like a child growing up. A child wants direction. They tell you, "You know, dad, you don't know what you are talking about." But in reality, they want you there. That book had a huge impact in the early part of my life. Just talking about what freedom really means to different people. I had a chance to think through what that meant to me.

I love reading history books. I was reading about Napoleon, and all of his great conquests, or reading about Churchill, and the leadership that he provided during the war and after to Britain. Those are books that had an impact on me. I try to relate. I wonder, how would I have acted. How would I react during the times that they were in if I had the same challenge that they had. I just marvel at how President Bush is handling the war. That takes guts. I've got a lot of admiration for him and how he's handled this.

Do you ever take a step back and second guess yourself? Do you have any regrets, looking back on your career so far? Things you would do over again or would do differently?

Henry Kravis: My life, yes. My career, no.

Get the Flash Player to see this video. My career, I have really just loved it. It has been a challenge. There is something new every day for me. I mean, the fantastic thing about the career, it's not just buying and selling companies. It's the fact that we've got a portfolio of companies, that range all the way from hotels and motels, to television stations and cable TV companies, and oil and gas, and consumer products, and industrial products. And anything that I want to know more about, I have that opportunity. It's right there, it's in our portfolio. And I can spend the time at a factory or with the management and learn as much as I want. And so that's wonderful, and that's a real challenge. You can't get bored doing that.

[ Key to Success ] Passion

When I went through school, I was in a hurry. I was an economics major as an undergraduate, and I was a finance major in graduate school. I was in a hurry to succeed when I got out in the business world. I'm sorry I didn't take more courses in the humanities and in history and in the arts. I'm trying to make up for it now. I have a reasonable art collection, and I try to study 18th and 19th century European painters and art. I spend time with the New York City Ballet, and I enjoy the ballet. I'm sorry I didn't read more history. Things always repeat themselves. History is a great teacher. It's a great lesson for the future.

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