Exceptional, June - December 2014
On his own terms
Growing up the only son of a famous billionaire businessman, Ross Perot Jr. could have easily been outshone by his father’s success. But, determined to make his own mark, the 55-year-old developer has expanded the Perot fortune, forging a new future for his entrepreneurial family.
Many years ago, Ross Perot Sr. was quoted as saying, “There is no better place to live than in your son’s shadow.” He was referring in part to the difference in size between himself and his only son, Henry Ross Perot Jr.
But these days, the famously diminutive billionaire who found prominence as an independent presidential candidate in 1992 (and again in 1996) could easily be referring to his son’s success as an entrepreneur.
For Perot Jr., growing up with a famous and hugely successful father used to bring the inevitable accusations of piggybacking, but these days he has less to prove. He has diversified the family businesses, moving away from their early IT specialization, focusing instead on blockbuster real estate deals such as the AllianceTexas airport project, which helped transform north Fort Worth, Texas, as well as the American Airlines Center in Dallas.
In 1988, he founded Hillwood, which is now ranked among the top 10 real estate developers in the US and is the top residential developer in Perot’s hometown of Dallas-Fort Worth. As Chairman of the Board, he led the sale of his father’s publicly traded IT company, Perot Systems, to Dell Inc. for an astonishing US$3.9b in 2009.
On a personal level, he is no slouch either, spending almost eight years flying F-4 Phantom jets in the U.S. Air Force Reserve. And at 23, he was the first person to circumnavigate the globe by helicopter.
Perot attributes much of his success to the example his father set for him. “My father will always be my hero,” he says. “He pioneered two successful companies that paved the way for the technology services industry and has devoted much of his life to helping people in need and those who serve our nation in the armed forces.
A Perot cannot be afraid to take risks...
“While we share the same set of values,” he adds, “we can — and do — have different business interests. Dad has been there to give me career advice along the way, but he has always let me call the play. His legacy certainly influences my role as a leader.”
Perot describes this legacy as a willingness to persevere and take risks while maintaining strong values and ethical standards. His parents instilled these values in him and his four younger sisters, who grew up around their father’s hugely successful Electronic Data Systems (EDS) from its creation in 1962 to its sale to General Motors in 1984 for US$2.1b.
“I watched EDS being built in our living room at night, which was an amazing learning opportunity for a kid,” he remembers.
A future in flight
At first, though, it seemed that Perot’s destiny lay in the armed forces. He joined the Naval Reserve Officers Training Corps while he was in college, going through the Army’s parachute school at Fort Benning in Georgia as a freshman and enrolling in the Marine Corps boot camp in Quantico, Virginia, when he was a junior.
By the time he got his degree in business administration from Vanderbilt University, Tennessee, in 1981, he had decided to join the Air Force. However, he says the pull toward entrepreneurship “runs deep in our veins,” and eight years later, he joined the family business, using it as a springboard to start his own venture.
Seeing an opportunity for real estate development in north Texas, Perot founded Hillwood and began buying strategic parcels of land. The economy slumped soon after, but he kept buying.
Hillwood’s big break came when Perot partnered with the Federal Aviation Administration and the City of Fort Worth to build Alliance Airport, which serves as the hub of AllianceTexas, the company’s mixed-use development. Functioning as an inland port, it is a base for BNSF Railway, American Airlines, J.C. Penney and AT&T, among other companies.
I am optimistic about the future and think we will continue to be surprised.
“Our vision in 1988 was to build the world’s first industrial airport,” Perot recalls. “Over the past 25 years, what initially started as Alliance Airport has grown into an 18,000-acre development that has dramatically transformed the landscape of north Fort Worth and the surrounding area.
Our AllianceTexas development has brought US$5b in economic impact and created 31,000 jobs.” Following on from this successful venture, Perot bought the Dallas Mavericks basketball team for US$125m in 1996, using the purchase as an opportunity to turn around the fortunes of a downtrodden Dallas neighborhood with new real estate development.
He narrowly persuaded local voters to approve a US$125m government bond for the project, and the American Airlines Center was born. In 2000, he sold the Mavericks for US$285m.
He then turned the land surrounding the arena into a mixed-use urban development called Victory Park, which was completed in 2006 at a cost of US$1.5b. But the development experienced a setback due to the recession in 2008, when businesses were slow to move in and some projects were put on hold.
Hillwood has retained ownership of the Victory land, however, and remains significantly involved in its development. Perot says there were “a thousand reasons why people believed we couldn’t build Victory Park in Dallas.”
Some observers think the original plan of 31 high-rise and mid-rise buildings on 75 acres was a higher density than Dallas could absorb and that the expensive retailers and fancy restaurants were too grand for the demographic.
Whatever the reasons, Perot prefers to focus on the positive aspects of the experience. “I learned the importance of having a strong vision and that every great master-planned development needs solid and lasting partnerships to be successful,” he explains.
“The team and great partners we recruited had the vision and tenacity needed to see the project through to what it is today. While Victory Park formally opened during difficult economic times for the city — and the nation — one can see how that project has helped the downtown transformation we are seeing in Dallas today.”
Texas may be home, but in recent years, Perot has diversified into other states, most notably California. AllianceCalifornia is a development similar in scale to the AllianceTexas project but is based in San Bernardino County, just east of Los Angeles.
Perot is also partnering with international groups to bring foreign investment into the US and to expand overseas, leading to ventures such as oil exploration in northern Iraq. Looking ahead, he believes his companies will continue to innovate.
Our success is dependent on our people, and I am proud of the strong organization we have built.
“I am optimistic about the future,” he says, “and think we will continue to be surprised by both the regional and US economy. We will continue to focus on industrial development at AllianceTexas and AllianceCalifornia, where we still have millions of square feet remaining for development.
“One of the biggest challenges we will face is continuing to take risks when the market presents itself,” he adds. “We will also have to remain focused on recruiting and retaining top talent. Our success is dependent on our people, and I am proud of the strong organization we have built over the past 25 years.”
The top talent he mentions could, of course, include the next generation of Perots — a prospect he is excited about. “My goal is that we provide them with the education and leadership skills they need to be successful and to carry on the tradition of recruiting and empowering smart, hardworking people and enabling them to achieve great things,” says the father of four.
The Perot family is a close-knit group, and each member participates in some way when it comes to managing its resources and enterprises. “That said, we have also always had great flexibility when it came to pursuing other interests and managing our business affairs,” Perot adds.
“I guess the only hard-and- fast rules a Perot must operate under are getting a sound education; being honest and ethical in our business dealings; treating the people who work for us with respect and dignity; and finally, a Perot cannot be afraid to take risks when appropriate.”
Rules Ross Perot Jr. has clearly taken to heart.
A panel, Family Business: leveraging the tradition of innovation and sustainability, will be held in June at the EY World Entrepreneur Of The Year™ in Monaco. Learn more.