(light music) - From growing up on a farm outside Stockton to building signature communities and helping launch UC Merced, Fritz Grupe has spent more than six decades making an impact.

In his book, "The Art and Science of Leadership and Management," he distills a lifetime of lessons and discusses the events and people that define his story.

Welcome, Fritz.

- Well, thank you very much, Scott.

- I wanna start with you are known as developer, builder of communities, you know, helped launch UC Merced.

You added author now.

Now, you actually have two books, "The Art and Science of Leadership and Management," but you've also written another book as well, and what is that one?

- This one's called "Enjoy the Ride."

- "Enjoy the Ride."

Another business book?

- Yeah.

Well, it's a little bit of the history of our family.

What prompted the book is our family said, "You know, you ought to write down some of this stuff, because people will ask you."

I mean, if you look back, you don't see everybody's problems.

You and I've discussed this before, it looks like, all you've had were successes.

So I wanted to talk about all the dips in my life and the major setbacks, and also my great, I have 13 great grandkids, - 13 greats?

Wow.

- 20 grandkids.

And when my great-grandfather came to California, before it was the state, I wished I could interview him today.

- Oh, I bet.

- And he never did write down anything, so I said I had to write it down from my perspectives so my great grandkids someday will have... And then you kind of get into it.

And then there were so many lessons from business that I've learned through the ups and downs.

People said, "You know, you ought to just do something."

But there's so many books on leadership and management, right?

This thick, great books, great leaders, manager, but there's no pilot's check sheet.

If all you wanna do is get in the airplane, make sure you're doing everything, it's not a how to and how I did it, but it's a checkoff sheet.

- Well, one of the things I love about this book is that it is so compact.

I mean, it's full of thoughts, ideas, maxims, things like that, but it's very compact.

Who'd you write it for in addition to your grandchildren?

- Well, the big book was for the grandkids.

This one was people that are in business asked me, said, "You know, it would be great to have a synopsis of your..." So, I was going through giving a talk on something, and Steve Case, I don't know if you know that name.

- Yeah.

The guy who started America Online.

- Yeah.

He started AOL.

And another friend of mine, Jim Morgan, who did Applied Materials, and then a third guy who's got an aerospace company in LA was international president of YPO.

They all endorse the book and they all say, "Fritz, you ought to just write it up."

So it's, you know, 30 pages.

I mean, you know, like it's got all the chapters in here, and it's not my history.

A lot of it starts with Aristotle.

It just goes back to different things.

But there's, was there eight chapters and, you know, chapter on change, innovation and competition, how much could you write on that?

It's two pages.

- Oh, well, actually in the book, you mentioned competition, is one of the things I was gonna ask you about anyway, which is you talk about how competitors, and I forget the exact line, but competitors and people that are predators, I think, are actually helpful in some ways.

What were you thinking about that?

- Well, you know, people talk about, "Well, my business competes with your business," or cities said, "My cities in competition with your cities."

I say management of your cities in competition with the management of that city.

So I said, "Properties don't compete.

Their managers do."

Every property, every human has its own deal.

One of the great Drucker quotes, "You should build on a people's strengths and make their weaknesses irrelevant."

- Interesting.

- Because we all have weaknesses.

So get somebody else to cover those and focus on where you're strong.

- Take us back to the beginning, Fritz.

So you grew up in a farm.

Okay, a little bit outside of Stockton.

You were in Aggie for a while at UC Davis, right?

- Yes, I was.

- And you got into the real estate business somehow.

Take us back to then, how'd you get started?

- Okay.

Well, when I got out of college, I went back to the farm, and after I was there a while, well, I got married my senior year.

So responsibility starts right away.

- Luckiest move you ever made, huh?

- Boy.

Well, you've met my wife.

- I have.

- Yeah.

- Phyllis's quite a lady.

- Sure was very good.

So in any event, it shows you what a salesman I am to get her, right?

- (laughing) It's true.

- So I went to my dad and I said, "You know, Dad, not right now, but someday I wanna make 10 grand a year."

And he said, "You better leave the farm."

So my dad had been a real estate broker in Stockton.

He'd retired and sold, developed lots and sold 'em to builders.

And then he get the listing back on the lot.

So he said, "Go to work for my old firm."

He had five partners and those days it was insurance and brokerage.

So I did, and I found out I like sales.

And sales are great, because you find somebody who's got a need that you want and you fill their need and they pay you.

- That's right.

- So, you know, I enjoy, the more needs I filled, the more I made.

And so after five years of selling houses, and it was a great research.

You talk about getting a PhD, you take women around the car for five years, you know what women want in a house.

And so the builders were all a bunch of white guys kind of building for themselves.

And there there was no, well, you can remember back in those days, there were no women bankers, there's no women in the title company.

I mean, they were receptionists, but they weren't the leaders.

There weren't women architects.

So a builder that I had sold homes for went busted.

So I made a deal with his bank to take over the unsold lots.

And then I hired a guy with a contractor's license and got women involved in designing homes.

My wife did the interiors, started building them.

I just never planned it.

- Well, you know, it's interesting that you say that.

One of the things that a mentor of mine, her name is Helene Freed, and she used to design public spaces, and she said, "If you're going to design a successful public space, design it for women rather than for men."

And she said the reason for that was is that women lead men.

And if women will show up, then the men will follow.

And so it's interesting that you say.

The other thing is, is that your communities are special in the minds of many in the development community.

And you know, as a retired developer, I knew this well, which is that as they have aged, they've gotten better, because of the way that you approached development.

Can you share with us your philosophy on how it is that you create long-term value, so that neighborhoods are places that people don't just move into, but they wanna stay decade after decade?

- I built houses now in our communities where there's three generations living there.

- [Scott] Really?

- You know, to prove your point.

And I get letters from people that have lived there.

A guy write me a letter the other day that was retired superintendent of schools.

And he says, "I'm sitting on my deck, back deck at your lake looking it over.

And I just wanted to tell you, it's been the happiest 40 years of my life, for my wife and I to be out here like this."

So it's very rewarding too.

But you triggered a thought, Scott, is, you know, make the women happy, which is true.

I can tell you a story as a salesman, if you want, about who's in charge.

I dunno if we got time for that.

Hold that one?

- Hold that one.

(chuckles) - But one of the things, one of the ideas I had in our first community was I was gonna build, and this is going back to 1968, so no one had built lakes in northern California.

So we were living the first lake builder, and then at the end of the lake said, we're gonna put a beach in.

- Really?

- And so we put in a big sandy beach and a wall between that and the lake.

So it looked like the filtered part of the water spilled over in, but it was a sandy beach.

You just walk right in the water and then there's a lake beyond it.

And so I put the sail center next to the beach.

And on the weekends when you get most of the crowd, I'd hire young kids to sailboats around in front of the office.

So there's kids out there and kids playing in the sand.

Now they tell their mother, "Why are we gonna go look anywhere else, Mom?"

- Smart, smart.

So you started building these communities and you are known for communities that have natural amenities like water and things like that.

I'm curious, when you decided to create a business model, what made you focus on all of those amenities as being kind of a core part of your brand?

- Yeah, well, one of the things is, and you ask the thing that why it kept the values, is I've always gotten the homeowners really involved.

So they took ownership of the development with strong homeowners associations and they have a good financial reason to be involved, protect their investment.

- [Scott] Sure.

- And so when they get involved in the community and get 'em involved in the schools, one of the things that I did right off the bat is bring the schools in first.

And in the last one I did in Stockton, Brookside was we actually built the school way ahead of time.

Instead of paying the bedroom tax, I said, let us build a school first so the kids have a place to go right there.

And then gimme credit for the taxes that went along.

And that was very good because if you take, you think about, you're not just selling to, if you're selling to a family with kids, you're not just selling a home, you're selling the whole environment.

So if you do all of that, then they stay in its value and why move.

- If you, when you look at that and the team that you've built over the years in the company, what are sort of the two or three values or attributes of somebody that you're looking to bring on your team that you can share with all of us where you say, you know what, even if they don't necessarily have all of the technical experience that I'd like, that's the type of person that I want associated with Grupe communities?

- Yeah.

You know, that's a great question.

And one of the things that you learn, I learned early on, I learned this from my wife, is how important gut feel is about somebody.

You know, I always... Well, first of all, as a salesman, how do you go to build an organization?

I ended up building in eight states, and before I was 40, I had 10,000 units under construction.

- Wow.

- How do you... No, before I was 50, started at 42.

So how do you do all that?

How do you go from a salesman to a manager?

And one of the things is you, or your values, your values create your corporate culture.

You don't say, "There's a corporate culture I want to emulate."

It emulates you.

And so one of the things that I did, mistakes that I made in the beginning, I hired a couple guys and my wife says, "I don't know why you hired him.

I don't think he's gonna work."

I said, "Well, look at his resume."

She said, "I don't care.

I just don't feel it."

They didn't last.

And it rarely has anybody have to be let go from our company, either they feel comfortable there or they don't.

And when they do, they trust each other and they have each other's back, because we're all gonna screw up.

I mean, I've screwed up plenty.

And to have somebody cover your back is good, but if you're not the kind of person that'll cover another guy's back, they're not gonna cover yours.

- Hmm.

That's true.

And it's interesting you mention that because we're in a moment right now where a lot of people, particularly young people, you know, the Gen Zs, the millennials, and now the upcoming Gen Alphas, when I go out and talk to them, they say to me, "I'm never going to trust anybody.

It's every person for themselves."

Because, you know, that's the business environment today.

If one of those young people were sitting here with us, what would you tell them in response?

- Wrong.

- Okay.

- One is, there are companies that are like that, and there are people that are like that for sure.

But you don't have to hang with 'em.

I mean, why do you hang with negative people?

I mean, if you wanna have joy in your life, which I do, is you hang with people that are positive thinkers.

And one of the problems I think we have today is that people are saying, "I don't trust the government.

I don't trust universities.

I don't trust their research.

I don't trust the police department."

People who think that way believe in conspiracy theories, they get way off.

There's fundamentals at work.

Basically, I think people are good.

I think a lot of it's the way they're being brought up.

- Well, when you talk about the way that people are brought up and you know, examples, whether you decide to associate with one group of people in one set of values or another, one of the things that you and Phyllis are known for beyond just the success of the business, is the impact you've had in many places, in particular in the San Joaquin Valley area with philanthropy.

And like to ask you a little bit about what has inspired you to get involved in so many things.

If I'm down in the San Joaquin Valley, particularly in the area around Stockton, both of your touch is reflected in so many different places.

You guys had a huge business to run.

What inspired you and and how'd you make the time for it?

- Well, often when I give speeches, you know, people say, "What is it?

Luck?

How'd you get the way they are?

How were you successful?"

I said, "Most of what I have, I didn't earn."

- What do you mean by that?

- Being born in America.

Start with, look at the people, risk they take just to get here.

I'm born here and raised by a great mother and father, got a chance to go to college.

You know, and the freedoms we have here that people take for granted, that other people never gonna have a shot at.

Now I didn't earn any of that.

It gave me the foundation to do what I could do.

And the other is, Scott, I know you have too, but you know, I've had some things that aren't so pleasant happen to me, but I've never felt like a victim.

Anybody who feels like a victim, that means somebody else is controlling your life.

I don't want anybody controlling my life.

I'm in control of my life.

So I don't feel like a victim.

And a lot of times, people think that there's a threat out there.

Something's threatening me.

Well, a threat can also be an opportunity.

- Hmm.

Tell us more.

- Threats... Okay, when you see something that's not going right, you know it can be a threat, right?

If you can solve the problem you're gonna do well.

- This is true.

I want to go back to what you said about you didn't earn it.

And that being born in this country with all of the freedoms that we have has been, you know, was a benefit that essentially you're saying created the platform for you to do what it is that you've done.

What do you believe that we as a society owe each other because of that benefit?

There's a lot of talk right now about what the haves and the have-nots.

For the haves, what's your definition of paying it forward?

- Okay, well one, our economy's in what I call a K-shape economy.

When you talk to economists about how we are and you got a vertical and a horizontal line that shows it going up or going down.

Well right now our economy is like a K, part of it's going up and part of it's going down.

And if you're in the part that's going up, you go, "What's the issue here?"

If you're in the part that's going down, said, you know, "My gas just went up 50% and my groceries haven't come down, I'm not feeling so good."

So half of Americans aren't feeling so good.

Well, fewer than half are saying... So, as we know, and you know, Scott, that over half of Americans don't have any assets.

- No, they don't.

- So they're not going up in this inflationary economy that we're in.

If you already own a home and you already have a good job, you know, things are different.

- It raises a question for me.

You travel in some fairly special spaces and know a lot of the people whose names and faces are, you know, shown on the media and who direct resources in the economy, do those people get what you're saying?

- Many do.

Many do.

- A lot of folks think that many don't.

So yeah, it's surprising to hear that.

- Yeah.

It's many do.

One of the things that I encourage people that are able to not only give money, but give their some of their time.

And that's what you've done too, you know?

And so a lot of people that are good business people, they could help out not for profits by being involved.

I mean, I've started five not-for-profits, my wife, two of them, and is trying to help those help themselves.

Give them a chance.

And some people, when they say pull themselves up by the bootstraps, well, if they don't have any boots, it's a hard pull.

So what are you tugging on?

- Yes, indeed.

- And so when my wife first started this community partnership for families, which was working with people that were having kids were having all kinds of struggles in schools.

And the school teachers can't fix everything.

You gotta help the families.

So she wanted to help the families.

So the goal was all children will start school ready to learn.

Well, a child that's never met his father and his mother's on drugs, what chances he get when he gets to school?

How do you help that?

School teacher can't do that alone.

- No.

- So this is the backup.

And one of the things that brings joy to my life and my wife's life is actually seeing the people that it helps.

You feel good when you give money.

And we need people to give money.

But also when you get out there, it's even more beneficial when you get to see the results.

- When you're talking to young people, I know that you like to spend a lot of time with young people and that universities and other places call you in all the time to give speeches and talks, things like that, what is it typically that you're most focused on, message wise, that you want those young people, those people who are going to be the next Fritz and Phyllis Grupes to take with them and try to apply?

- Well, one of the things is I have a picture of a big yacht, sailboat parked in harbor, a picture of it at night, just gorgeous picture of this boat in harbor.

And I give this picture to my grandkids with a label on it.

A ship in harbor is safe, but that's not what it's built for.

- Hmm.

Interesting.

- And so, you know, get out there.

What are you afraid of?

- That's actually something you talk about a lot about fear and managing fear.

When you think of that issue, when did you ever have to manage fear?

- Well, one of the things that I wouldn't know if I was fear, but high anxiety.

- Okay.

- I separate 'em.

- Okay.

- And when there's high anxiety or fear, have clarity, write down exactly what you're afraid of.

Fear doesn't stop death, it stops life.

- Hold on, pause for a second.

Fear doesn't stop death, it stops life.

Go a little bit deeper on that.

- Well, when you think about it, so when you got a problem, one of the things is, I've learned a long time ago, and you're looking at a problem, is it the problem or is it my perception of the problem?

So when there's a problem out there, it may be a problem for one person, another guy goes, "That's a problem for you?

Come on."

And so, it can help you, or whatever.

So I think that if you want to get rid of anxiety, have a plan in writing.

Here's what I'm worried about and here's what could solve it.

Not that you know how to solve it, 'cause you may have to go to someone else.

And that's where having a good friend is really important.

A lot of people have acquaintances but not really good friends.

And you go to somebody, you can kind of get a sandy check at least.

But the reason I say write it down, when I ask young people, I say, "If you got a goal," "Oh yeah, I got goals."

I said, "Can you show 'em to me?"

"Well, I haven't written 'em out."

I said, "It sounds more like a dream to me.

Maybe even an aspiration.

But a goal is different."

You know, in the book I talk about what it is to be a goal.

A goal, you have to be clear in the intent and the scope of it.

You have to have a timeframe and a cost and results expected all in writing, or it's an aspiration.

- Alright, - So, clarity.

- And I think, we'll leave it there.

The book is "The Art and Science of Leadership and Management."

Fritz Grupe, thank you for coming on and sharing your story.

- Thank you very much for having me.

I enjoyed it, Scott.

You do a great job.

- (laughing) Thanks a lot.

You made me look good.

And that's our show.

Thanks to our guest and thanks to you for watching Studio Sacramento.

I'm Scott Syphax.

See you next time right here on KVIE.

(light guitar music)