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What It Takes - Leslie Wexner
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00:00:00 MUSIC

00:00:01 ALICE WINKLER: There are only two people who’ve been CEO at a Fortune 500 company for more than 50 years. One of them is Warren Buffett. The other is Les Wexner, and Wexner actually beats out Buffett by a couple of years. Les Wexner of Columbus, Ohio. If his name doesn’t ring a bell, it might be because Wexner doesn’t like the limelight. He rarely gives interviews. But try this one, Victoria’s Secret. There you go. That rings a bell. That’s just one of the businesses in Les Wexner’s retail empire, L Brands, an empire you could say he’s been building since he was 11 years old.

00:00:46 LESLIE WEXNER: The first business I think is interesting. I was do — you know, kids do babysitting, so let’s say you're babysitting and you’re getting paid 50¢ an hour, or whatever I was getting paid then, and I figured out that if I could take 10 kids to the park on a Saturday, I could get 50¢ a kid for 2 hours, and so I could make $5.00 an hour, or $10 for 2 hours. Babysitting one-on-one I’d only make a dollar for two hours. So I look back and I said I understood leverage.

00:01:15 ALICE WINKLER: From babysitter to billionaire bra broker — try saying that one ten times fast — we’ll tell you the all-American story of a self-made man on this episode of What It Takes, a podcast about passion, vision, and perseverance from the Academy of Achievement.

00:01:36 I’m Alice Winkler.

00:01:37 OPRAH WINFREY: "Hattie Mae, this child is gifted," and I heard that enough that I started to believe it.

00:01:43 ROGER BANNISTER: If you have the opportunity, not a perfect opportunity, and you don't take it, you may never have another chance.

00:01:50 LAURYN HILL: It all was so clear. It was just, like, the picture started to form itself.

00:01:54 DESMOND TUTU: There was no way in which a lie could prevail over the truth, darkness over light, death over life.

00:02:03 CAROL BURNETT (quoting CARRIE HAMILTON): “Every day I wake up and decide, today I'm going to love my life. Decide.”

00:02:09 JOHNNY CASH: My advice is, if they're going to break your leg once when you go in that place, stay out of there.

00:02:15 JAMES MICHENER: And then along come these differential experiences that you don't look for, you don't plan for, but boy, you’d better not miss them.

00:02:25 ALICE WINKLER: All right, let’s just dispense with the elephant in the room. There is nothing particularly sexy or salacious in the story of Les Wexner’s rise to become the titan of women’s lingerie. He’s a family guy with four kids. He’s active in his synagogue in Columbus, Ohio. He is a multi-billionaire with the art collection, the houses and the yachts to prove it, but at heart he’s a 5’6” guy from Columbus, Ohio in the shmata business.

00:02:57 MUSIC

00:02:58 LESLIE WEXNER: Came from a very modest circumstance. My father was born in Russia. My mother was the first child in her family born in the United States. No one had gone to college, and everybody worked hard and pretty much struggled. I felt terribly constrained just by the family circumstance and wanted to be successful, whatever that meant. I — it was, you know, different — successful might have been when I was at high school, maybe one day I’d have a car, you know, when I got out of college, maybe one day I’d have a new car. Pretty modest goals.

00:03:33 ALICE WINKLER: But they were goals that would take him beyond the life his parents had provided.

00:03:37 LESLIE WEXNER: I didn’t think my parents really knew what they were doing. You know, I knew they loved me, and I loved my parents, but they weren’t providing direction, and I knew if I was an adult I could probably do better.

00:03:49 ALICE WINKLER: But as Les Wexner explained to Mary Jordan, the Washington Post reporter who interviewed him for the Academy of Achievement in early 2017, he never imagined that his better life would involve a career in retail.

00:04:04 LESLIE WEXNER: My mom and dad had a neighborhood store. I had gone to law school. I really hated law school. In fact, I hated school generally, and my dad said, "Why don’t you just hang around the store for a few months before you, you know, begin your life?" And so I said, "Okay, what do you want?" And he said, "Well, if you hang around for a few months, you’ll learn how to open the store and close the store," and it was a little neighborhood store. It was, like, 15 feet wide, but that’s — well, that was the source of their income.

00:04:34 And I said, "Okay," and he said — 'cause after Christmas he said, "Your mom and I would like to go on a vacation," and he said, "You know, we’ve never had one." He said, "I’ve never asked you for anything, but I would trust you to open and close the store and take the money to the bank, you know, just do simple things." So I said, "Okay," and they did take the week off in January. Columbus had a blizzard, and their vacation was driving from Columbus to Miami, spending three days in Miami, and then driving back. So that was their big vacation after a lifetime.

00:05:08 And kind of happenstance had a blizzard in Columbus. I went to the store, and there as, like, I don't know, 18 inches of snow, so there was no traffic, and I felt very obligated to be there because I was kind of guarding the fort, and there was just nothing to do. You know, there's gonna be no one’s gonna come to the store, and I got bored, so I was curious to see what categories of merchandise my dad and mom made money in, and I could sort out the invoices, and they kept track of sales by category of merchandise, shirts and pants and skirts.

00:05:42 And I would look through the invoices to see, and I figured out that in what my dad called sportswear they were making substantial profits, and in the big ticket items, then dresses and coats, they were making no money, and when he came back from their vacation, we sat down in a Woolworths coffee shop, and I gave him the big ta-da, and he said it’s impossible. He says, "We make money on the big-ticket items," and I said, "No, you see them as big tickets, but you’re taking big markdowns, and there’s no profitability," and from that we got into a very classic father/son argument.

00:06:22 So, you know, he’d say, you know, "Go get a job." You know, "Your mom and I have struggled our lives to have this small business, and we’re gonna run it the way we wanna run it, and you don’t know what you’re talking about," and I said, "Dad, the — here’s the numbers. They don’t lie."

00:06:34 ALICE WINKLER: At this point, Les Wexner was about 22. His parents, by the way, had named the store after him, Leslie’s, but Les and his dad continued to knock heads over how it should be run.

00:06:48 LESLIE WEXNER: He’d throw me out of the store. He'd say, "Go home and go find a job." I’d pout for a week or two, and my mom would make peace with my dad. I’d go back to the store. He’d throw me out. And I just — and as I look back at it — and didn’t see it at the time, it was a classic father/son kind of argument about merit and manhood or value, and I was gonna —

00:07:09 I had decided quite subconsciously that I was gonna prove to my dad that I had real worth and I could do something, but the only language he understood was the business he was in, and so I thought his business was wrong. I’m gonna do one that’s right, and I invented one in my mind and began playing with it and making sketches of stores and fixtures and thinking about things that I might sell, and I had a spinster aunt, and I don’t think she knew what was going on in terms of what I was imagining.

00:07:42 She just knew that my dad and I were — weren’t getting along and I didn’t have a job, and my Aunt Ida said, "I’ve got $5,000," which was her whole net worth, and she said, "I’ll give you the $5,000, but you have to put it in the bank and promise not to spend it, but banks will loan money to people that have money, I think," and she said, "So if I give you the 5,000, you put it in a savings account, and you have to promise never to spend it because that’s all I have."

00:08:14 And my parents couldn’t have contributed. They didn’t — they had nil, and so I did, waited a couple of months, and went to the neighborhood bank, and I said, "By the way, I’m thinking about starting a business," and the loan officer at the branch said, "Well, how much money do you have?" And I said, "Well, I’ve got $5,000 in your bank," and he said "Well, what do you wanna do?" And I said, "Well, I don’t know. I’ve got $5,000. Would you make me a loan?" And he says, "Well, if you have 5,000, I’ll loan you 10, but why don’t you come up with an idea?" I said, "Oh." (LAUGHS)

00:08:42 MARY JORDAN: And your first idea was?

00:08:44 LESLIE WEXNER: Open a store. And it was a pretty modest store. It was located between a drycleaner and a supermarket in a neighborhood, not a shopping center.

00:08:51 MARY JORDAN: And you called it?

00:08:52 LESLIE WEXNER: The Limited because I had limited assets. (LAUGHS) It — people thought it was a terrible name. They said it sounds like a train, and when is The Limited leaving town? And I said, "No, no, it’s a — it describes the assortment, and it’s a romantic name."

00:09:08 MARY JORDAN: Do you think it was a good name in the end?

00:09:10 LESLIE WEXNER: Great name. I think it was a — people thought of it — maybe it had something to do with a British corporation. It was just kind of mysterious.

00:09:18 MUSIC

00:09:23 ALICE WINKLER: When I was in middle school, growing up in New Jersey in the 1970s, the main attraction of a trip to the mall was going to The Limited. This was in the era before Gap, before J. Crew, before Banana Republic. I didn’t know it at the time, but specialty chain stores were still a novel idea, and Les Wexner was leading the charge from his perch in the center of Ohio, determined to sell a limited number of items in a limitless way.

00:09:53 LESLIE WEXNER: I was so positive the first store would work that a shopping center was announced in Columbus, the first shopping center, and I signed up for a store in that shopping center. So I had — I leased the second store before the first store had opened, and so at that point I had a negative net worth of $5,000, but the lease liability and the — if I would have paid for the inventory and I knew what payroll — so I’d say here you have two stores. You know, they happen in sequence.

00:10:28 What’s the total lease liability? What is it gonna cost to finance an inventory? How many people would work in the store? And, you know, incidental expenses, like lighting and plumbing, you know, taxes. I knew that when I had committed for those two stores and the first one hadn’t opened that I was looking down the throat of a million dollars.

00:10:49 MARY JORDAN: Where did that confidence to take that risk come from?

00:10:53 LESLIE WEXNER: I don’t know that it was confidence. I didn’t know anything, but — so first I was just curious about how deep the pond I was getting into. I said, "Oh, my God, this is a million dollars, and I’ve got — I’ve levered the 5,000 I borrowed from Aunt Ida." I said, "Well, maybe I could 100 — $150,000 in business. Maybe I could get terms. I could actually sell the merchandise before I had to pay for it." You know, a lot of optimistic guesses of what — how it might work, and it worked a little bit better than I thought.

00:11:28 MARY JORDAN: So how is it that this guy from Ohio was able to know what young women wanted to buy?

00:11:35 LESLIE WEXNER: Well, he — I don’t think he knew. I mean, I just — I didn’t think about it that way. I knew the young women I knew, and I knew what kind of clothes they bought, so I thought I would just buy clothes, like, I thought they would buy, and then they did.

00:11:47 MUSIC

00:11:49 ALICE WINKLER: They bought lots of them, and he soon found himself with three and then four stores, but he thought four was all the market could bear in a city the size of Columbus.

00:12:00 LESLIE WEXNER: So I said but if you went to two cities, you could have eight stores. So — and that was the — kind of the amateur, the 27-year-old — or 26-year-old talking to himself, and so I was just playing — was just, like, scribbling on a napkin and saying to you, "This is pretty interesting, but how do you get from one community, Columbus, if I’m going to get to a larger number of stores? I’d have to be in multiple cities." And everybody knew that people didn’t have stores in multiple cities.

00:12:31 And I said, "Well, you know, I could try it." So I thought, well, when we lived in Chicago, my dad would commute an hour from the north side to the south side to work every day, so it was an hour and an hour coming, and I said, "Shoot, I could open a store in Dayton. It's an hour to Dayton and an hour back, so I'll just commute to Dayton." And I told my dad I was gonna do that, and he said, "You're — the merchants in Dayton will eat you alive. You’re lucky to be successful in Columbus." I said, "Well, I think it’s the same, and if the store doesn’t work, I could afford one failure," and it worked.

00:13:02 ALICE WINKLER: Okay, let’s just pause here for a moment to consider what Les Wexner is talking about because we live in a world that is so dominated by chain stores, it can be hard to remember that someone came up with the idea. When Wexner started his own first store in 1963, Chicago shoppers bought their clothes at Marshall Fields. Baltimore shoppers went to Hechts. Philadelphia had Wannamakers. St. Louis had Famous-Barr. Birmingham had Loveman's, and so on and so on.

00:13:36 LESLIE WEXNER: But I recognized — probably intuitively, couldn’t articulate it — we had a merchandise plan. We had a store design. We had a name of our store. We had a lot of things that were replicable, and so if I could open a store, and then I could open another one just like it, and then you could open another one in another city just like it, calling it leverage, you have a replicable model that’s repeatable, and there’s also financial leverage and human scale.

00:14:06 So I recognize if I had four stores then I’d probably have four assistant managers. Those four assistant managers have career opportunities to become store managers if I open more stores. You know, if I’m picking a style for one store, or a color of garment, why couldn’t I pick the same style for eight or ten stores? You’re just writing a bigger number. So what I tried to do was say, "What is what I’m doing? Could I copy it??" It’s like McDonald’s building more golden arches.

00:14:37 MARY JORDAN: Where did you get this idea? Did you see McDonald’s and think if they can do it, I can do it? Did you —

00:14:41 LESLIE WEXNER: Maybe. I don’t remember specifically, but I remember thinking the characteristics of Milwaukee, Columbus, Dayton are similar. Then I went to the — an office supply store, got a map of the U.S., and got a compass and a wax crayon, and I drew concentric circles out 200, 300, 400 miles.

00:15:02 ALICE WINKLER: That compass is big enough now to cover not only Atlanta, New York, Seattle, and San Francisco, but much of the world, from Shanghai to Lagos to Moscow, 3,700 stores, 88,000 employees, all going back to that week in a snow storm when Les Wexner figured out that the everyday clothes in his parents’ tiny store were the most profitable, and nothing is worn every day more than undergarments, which brings us finally to Victoria’s Secret, the most full-figured part of Les Wexner’s empire.

00:15:43 61.8% of the entire lingerie market belongs to Victoria’s Secret. That’s the statistic, as I record this podcast. You might assume Wexner went into the women’s lingerie biz because he was some sort of stereotypical red-blooded straight American man with an over-active imagination, and if you take him at his word, you’d be dead wrong.

00:16:08 LESLIE WEXNER: It's really just business.

00:16:09 ALICE WINKLER: Sometimes he doesn’t even bother to go to the famous Victoria’s Secret Fashion Shows, which, by the way, Stephen Colbert once called the Super Bowl of Underpants. So what was the appeal of lingerie to Les Wexner?

00:16:25 LESLIE WEXNER: 'Cause nobody was in that business. The funny story I like telling, I was driving to Dayton to visit the store, and I was thinking about what other businesses I could start. I said, "Well, I don’t know anything about the shoe business. You know, half the people in the world are men, so maybe we could start a men’s business. I’m a man." And I think, "Men don’t buy as much as women, but if our skill is in women and stores, do we — and everything that women buy or wear — "

00:16:53 You know, and I remember saying that, "Every — all the women I know wear underwear most of the time. All the women I know would like to wear lingerie all of the time," and I’m just driving down the highway laughing my butt off and thinking what a funny thought that is, and what does that mean? And I think, "Jeez, what’s the difference between lingerie and underwear? Lingerie has emotional content. You know, men wear underwear, women wear underwear, but lingerie is, you know — "

00:17:22 And so I said, "I wonder why no one’s done that?" So I spent about two or three years as I was traveling around in Europe, Asia, department stores, specialty stores, and I said, "I can’t find a lingerie shop." In my mind I said there must be this wonderful lingerie shop in Paris, or maybe in Zurich, or maybe in Berlin, or maybe in Vienna, or just — they don’t exist. They did — and I said, "Wow."

00:17:50 So I had this imagination that there’s this wonderful lingerie store except, I can’t find one in Paris.

00:17:56 ALICE WINKLER: Then one day he was in San Francisco for the opening of another branch of the Limited...

00:18:01 LESLIE WEXNER: And about a block away there's a small lingerie store, and the ladies in the store say, "You have to go see it. It’s really kind of interesting," and I went down there, and it was interesting. It was probably 800 square feet, and it was kind of Victorian, so it was, like, velvet sofas and Tiffany lampshades kind of a place. But it was interesting, and I just never had seen anything — and I called the owner up, found out who the owner — and I called him. I said, "Gee, next time I’m in San Francisco, I’d like to meet you," and he said, "Well, what do you do?" And I told him I had the store down the street.

00:18:31 And he said, "Oh, I don’t wanna meet you because if I — you just wanna understand my secrets, and, you know, you probably wanna start a business and put me out of business." I said, "No, I’m just curious," which I was, and about a year later I get a phone call.

00:18:48 It was Roy Raymond, the owner of Victoria’s Secret, which was, at the time, a local chain of six stores and a catalog business. Sales of lingerie had been good, but the business was failing miserably. Les Wexner didn’t know a thing about how bras were fitted or constructed, but if he knew one thing, it was how to run a business. So he bought Victoria’s Secret for a million dollars and somehow, over the years, managed to turn sexy into mainstream fare at the mall. And what has been Victoria’s biggest secret?

00:19:23 LESLIE WEXNER: I think probably it’s the universal appeal of lingerie. I mean, we’re selling the same things in Columbus, Ohio at the same time we’re selling them on Bond Street in London, Fifth Avenue in New York, and the Mall of the Emirates in Dubai and in Hong Kong and in Shanghai. It’s the notion of sexuality, sensuality, how women feel about lingerie. It’s a universal thing. That’s surprising to me, happily so.

00:19:59 ALICE WINKLER: Les Wexner likes to say that he can’t take credit for creating anything new. His talent was just getting there first.

00:20:07 LESLIE WEXNER: I don’t think we've — I’ve invented anything. You know, Henry Ford really didn’t invent the car, and Steve Jobs didn’t invent the cellphone, and he sure as hell didn’t invent the digital revolution, but he could adapt, put things together in creative ways, and I can remember being in the UK and reading a London newspaper, and they were saying that Marks & Spencer sold, I don’t know, 80 or 90% of all the lingerie and underwear sold to women in all of England.

00:20:36 And then the remarkable thing was that women of all ages, the most popular garment, single garment they sold was the thong, and I said, "Gee, that’s really interesting, you know, about English women, about that that could be it." So I go, I said, "Maybe we should sell thongs," and so the ladies that were running Victoria’s Secret said, "Oh, no, that’s really trashy," and I said, "Oh, let’s just try it and see." So I think in what we do there’s a lot of let’s try it and sees, whether it’s a new color or a new style, but we didn’t invent cosmetics. We didn’t invent lingerie.

00:21:11 And if you know the customer then you can match the merchandise, and then you can market it. The marketing is kind of the icing. The foundation is the cake. That’s the merchandise, and then the question is do the customers, do they want cake or do they want cupcakes or donuts? What is it? The intriguing thing, to me, is that as I get older and older, staying in touch with what society, young women want.

00:21:35 ALICE WINKLER: And that is what Les Wexner loves about retail. It’s like a riddle where the answer’s different week to week.

00:21:43 LESLIE WEXNER: It’s just wonderful 'cause it’s all about people. (LAUGHS) And if you like accounting, you can do accounting. If you wanna do money and banking, you can do money and banking. There’s a tasteful part that comes in the selection of merchandise, store design, systems design. So everything — all aspects of business come together in retailing, and it’s really tough because it’s relentless. It's — we’re not building jet engines.

00:22:08 We’re guessing what young women are gonna wanna buy next week and three months from now, and so the fickle fashion, the challenge of it, you have to be in the game every day 'cause it’s changing. We don’t have a book of orders like GE does, making jet engines, and they design a new one every decade, and the order book lasts for three years, and they’re managing to it.

00:22:29 MUSIC

00:22:32 ALICE WINKLER: For 52 years and counting, Les Wexner has tirelessly followed cultural trends and predicted what would stick and what would not. He’s also masterfully understood the life cycle of a business, choosing just the right time to plant, to grow, to harvest, and to turn over the beds. When he was the king of apparel with The Limited, Lane Bryant, and Abercrombie & Fitch, all part of his dominion, he suddenly pulled up the stakes — to keep this metaphor going — switching to lingerie and beauty products.

00:23:07 Those businesses earn billions of dollars per year. So what does success mean to Les Wexner these days?

00:23:15 LESLIE WEXNER: Well, I think success, it's — success is more about purpose, I think. I think that's what's really important. Nobody remembers who sold the most togas in Rome. People sometimes ask about success, and they say, "Well, what’s your legacy?" And I say, "I think it’s really a dumb question." I think the question is what am I doing now, and do I feel good about myself? Am I proud of myself? I went through, started the business, the store was successful, and by the time I was 30 years old, I was several times a millionaire.

00:23:49 And I knew it, but I can remember, just as an example, it wasn’t very important to me, and I remember saying to my administrative assistant, "Do I have any money?" And she said, "Why do you ask?" And I said, "'Cause I wanna buy a car," and she says, "Well, of course you have money." How — you know, so how I kept score was the growth of the business, but it wasn’t about score in terms of how much money I was making.

00:24:14 I felt good about what I was doing. I knew I was employing people. I was growing the business. It was just tons of fun. So it — I would — I think this would probably be analogous to how an athlete would feel that just enjoys the sport and the fact that you can — you get paid just made it all the better.

00:24:31 ALICE WINKLER: And the side benefit of all that pay is that it’s enabled Wexner to give away a lot of money. He and his wife Abigail funded The Center for Public Leadership at Harvard’s Kennedy School, The Center for the Arts at Ohio State, and The Institute for Pediatric Research in Columbus. Their foundation also supports fellowships for Jewish leadership in Israel and in the United States. Wexner devotes a lot of his time to his philanthropic pursuits, but even as he approaches 80, he’s all in when it comes to running his businesses.

00:25:06 MUSIC

00:25:09 ALICE WINKLER: Journalist Mary Jordan wanted to end her conversation with this retail giant by hearing his thoughts on the future of stores in the age of online shopping. Wexner began his answer with the long view of technology, explaining why he thinks the train, actually, had the greatest impact on retail by allowing goods to be shipped, and next in line was electricity, which allowed for lights and air conditioning and escalators.

00:25:38 MARY JORDAN: And so what’s the future? What — is this business — I mean, is everything gonna end up online? I see today in the Wall Street Journal they’re saying Amazon is gonna take a run...

00:25:47 LESLIE WEXNER: No.

00:25:47 MARY JORDAN: ...at the lingerie business.

00:25:50 LESLIE WEXNER: No. I think there's a — humans are pack animals, you know? So in biblical times in, you know, the great market cities in Europe or the United States, so people wanna be with other people, and in a way the more that we’re isolated, whether we’re living on farms or we’re only talking to our cellphone, the greater the need we have for group experience, and so, yeah, I think shopping goes in cycles where the stores are dull or maybe the marketplace isn’t that interesting, but foundationally, just basically human nature, we like to be with other people.

00:26:24 So while people are saying that no one is going to go shopping because it’s just inconvenient and it’s not as easy as buying online, well, why are people going to concerts? Why are people going to museums? Why are they going to sporting events? I mean, why would you spend $3-or-$5,000 for a ticket in the — to go to a Super Bowl game when you can watch it at home for free? And a beer won’t even cost a dollar and — you know?

00:26:47 It just — or why do people go to restaurants between frozen food, food that’s delivered and microwave ovens? I mean, no one should ever go to a restaurant. It doesn’t make any sense. You have to travel there. You know, it’s — why do people —

00:27:03 MARY JORDAN: So ten years from now?

00:27:05 LESLIE WEXNER: It'll be the same. The question is what the shopping environment will be like. Will it be more like Disneyland? Will there be big screen TVs when you go to a shopping center? Will there be waterslides, or will there be virtual reality? When you go to a shopping center is it all fashion stores or is it health food stores, yoga parlors, and — I don’t know — Whole Foods?

00:27:31 It's something interesting, and we were talking about the great shopping streets in England. In the 17th century was — somebody figured out that calicoes, the kind of print in fabric which came from India, were colorful, but if you couldn’t see them, you wouldn’t know about it. So the idea of putting merchandise in a window so when people walk past your store, they could actually see things, somebody invented that, and that changed shopping because people could actually go window shopping.

00:28:00 It didn’t exist. Shopping, you went to a shop, an office, if you would. You know, it’s like in the western movies when you go to the general store and, "I need a dress, and I need a pound of coffee," and somebody goes in the back room and brings it out. It’s like the idea of display shopping, self-service, all those were inventions. I think technology is going to aid retail much more dramatically than technology is just you buy it online.

00:28:00 ALICE WINKLER: That’s Les Wexner, the founder and CEO of L Brands, which includes Victoria’s Secret and Bath & Body Works. If you liked this episode, share it with your friends on Apple Podcasts, and if you haven’t subscribed, do it. In two weeks, we’ll post our 50th episode, and we don’t want you to miss it. I’m Alice Winkler, and this is What It Takes from the Academy of Achievement.

00:28:55 MUSIC

00:28:59 ALICE WINKLER: Funding for What It Takes comes from the Catherine B. Reynolds Foundation. Thanks for listening.

00:29:05 MUSIC

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What It Takes is a podcast of conversations with well-known people in almost every field. The interviews have been recorded over the past 25 years by the American Academy of Achievement. They offer life stories of people who have had a huge impact on the world. They offer insights you can apply to your own life.

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