Entrepreneur Advises Students to take the"High Road" in Business

Students at the College of Business heard a real-life example Nov. 29 of how good ethics translates into smart business.

Kenneth Woolley, the chairman and CEO of Extra Space Storage, spoke at the Dean’s Convocation for the College of Business and told the students how his company has grown to be the second-largest self-storage company in the United States.

 

He said in 1987 he built a public-storage facility in Springfield, Massachusetts, and sold it to Public Storage with a guarantee that the company would get a certain rate of return on the property. Three years later Public Storage came to him and called his guarantee, meaning he had to pay them $265,000 – money he did not have at the time.

 

“I told Public Storage I really don’t have the money to pay you,” Woolley said. “I know I owe it. Please work with me. I’ll sign a note and try to pay it off over time.”

 

He paid the company off a year and a half later. In 1998, he had decided to expand his company dramatically. He went to Prudential Real Estate to ask it to invest $100 million in his company. They asked him for references and someone at Prudential Real Estate phoned the self-storage company in Springville. Woolley said the company told Prudential that they could trust him.

 

Woolley said Self Storage told Prudential that other companies had sold them properties and offered them similar guarantees. However, unlike Woolley’s company, every other company failed to make good on their commitments. He said that Prudential later told him that “they made the decision to invest $100 million in our company after they had a conversation with Public Storage about my little $265,000 note. Isn’t that interesting? So, remember, in your business dealings take the high road, be honest with people, stick by your agreements and don’t try to weasel out…”

 

Later, Prudential Real Estate invested $1.8 billion in Extra Space Storage, helping the company pull off a $2.3 billion deal when it purchased all of Storage USA’s properties. Extra Space Storage now owns or manages nearly 640 properties and more than 425,000 units. The company has more than 2,000 employees with properties in 34 states.

 

Woolley advised the students to negotiate win-win agreements and to never take advantage of others.

 

“When you leave here get involved in a business that is high in terms of what it does for the community and what it does for other people,” he said. “Don’t get down in the swamps and the valleys of bad businesses.”

 

Woolley was an original investor in Jet Blue and is now the largest shareholder of Maxjet, an all-business class airline that employs 320 employees and has flights going to London from New York, Washington, D.C. and Las Vegas. He also founded an ice cream company, Richmond Foods, in a garage that became the United Kingdom’s largest ice cream company. He has developed 13,000 apartments in the Las Vegas area. He is now in the final phase of completing 5,000 apartment-condo conversions in Las Vegas.

 

The College of Business has been emphasizing the importance of developing ethical entrepreneurial leaders who have a strong understanding of the international marketplace.

 

“Ken is an excellent example someone who has implemented the key principles we are trying to teach,” said Doug Anderson, the dean of the College of Business. “Today our students were able to learn from someone who can teach by example and has enjoyed great success in the workplace, both nationally and internationally.”

 

Writer: Steve Eaton, 435-797-8640