The Four Clients, Which Are You?

In the book, Why I Left Goldman Sachs, the author Greg Smith describes himself as a “not very religious Jew” but that he appreciates the traditions around the Jewish holidays especially the Passover Seder.  He particularly likes the part of the story discussing the reaction of the Four Sons to Passover: one who is wise, one who is wicked, one who is simple, and one who doesn’t know what questions to ask.  He then goes on to say that just as in ancient Egypt it was told about the Four Sons, so too on Wall Street there are the Four Clients.

And I believe just as there are Four Clients on Wall Street, there are also Four Clients in commercial real estate.  These Four Clients represent universal truth.  By that I mean it’s as true today as it was 3,000 years ago and as true as it will be 3,000 years from now.  And these Four Clients transcend all cultures that have ever existed or will ever exist. 

About half my blog readers are clients and the other half are commercial real estate professionals.  So after each client description I give my suggested response of how the commercial real estate professional can best serve this particular type of client. 

THE WISE CLIENT

These are the ones we hope to always have as clients and fortunately many of my clients fall into this category.  They have excellent commercial real estate experience.  They know the ropes but they also respect what you bring to the table.  They realize you are an important cog in the wheel and they don’t grumble about the fee you earn. 

OUR RESPONSE: Treat them with the respect that they deserve.  Listen to them because you have the opportunity to learn from them.  Bend over backwards to get the deal done as promised.

THE WICKED CLIENT

The Wicked Client knowingly withholds adverse information from you about the property or about himself in order to get the best possible outcome for himself.  He has no problem  cutting ethical corners if that is what it takes.  He hopes that whatever he is hiding will stay hidden just long enough to get the deal done. 

OUR RESPONSE: When we find out that important information has been withheld, we disclose it to the light of day.  To not disclose it makes us a party to his deception.  So if it means we lose the transaction and/or the client we do what is necessary so we can go to bed at night with a clear conscience. 

THE SIMPLE CLIENT

The Simple Client thinks he knows more about commercial real estate than he actually does.  He generally has an over inflated ego and as a rule does not trust anyone’s judgment but his own.  If left to his own ways, the outcome of the transaction will get done but it will likely be a more painful process and have a less favorable outcome than if he would have taken your experienced counsel. 

OUR RESPONSE: It is our duty to protect the Simple Client from himself.  We should vigorously give them our best counsel (even when they don't trust us or our advice) but ultimately we leave the decision making to them.  As easty as it would be to be a "yes-man," give them your best counsel and even if they don't take it, they will deep down grudgingly admire that you weren't their sycophant.

THE CLIENT WHO DOESN’T KNOW WHAT QUESTIONS TO ASK

These clients are the most vulnerable, the easiest to take advantage of.  These are the clients that really shouldn’t own commercial real estate.  They don’t even know what questions to ask.  This reminds me of one of my clients, a recent widow whose husband before he died was the one who liked owning and managing commercial real estate.  She was a passive investor but now she had to make all the decisions on her own.

OUR RESPONSE:  Guide them through the process.  Give them wise counsel and charge them a fair fee for services rendered.   One definition of integrity is doing the right thing when no one is looking.  With the vulnerable client we show integrity when we treat them right, especially when they wouldn't realize it if we were taking advantage of them.  

So in ending this article I ask, “Which client are you?”  In reality, most of my clients are a combination of two or more of these traits.  Do an honest self-assessment and once you can honestly admit to yourself who you are then find the commercial real estate advisor who will work best with your personality bent.  If you have a tendency under stress to cut ethical corners find someone who will keep you on the straight and narrow.  If you have a tendency to be a bit blustery don’t hire a “yes-man.”  And if you believe you’re in over your head find the advisor who you believe will always be looking out for your best interest and not his own. 

Three Business Principles Steve Jobs Lived By

I had the opportunity over the Christmas holiday to read the excellent biography of Steve Jobs by Walter Isaacson.  Mr. Isaacson does not sugarcoat Mr. Jobs’s personality.  Steve Jobs would have been an awful person to work for as he could either profusely praise his employees or call them a piece of sh**, sometimes on the very same day.  To say the least, Jobs was a very difficult person to be around.      

That said, 100 years from now I believe he will be remembered as one of the great men of our era, held in the same high esteem as Henry Ford, Alexander Graham Bell and Thomas Edison. 

So what can we learn from Steve Jobs?  What made him unique?  What made him highly successful? There were many traits that made him successful, far too many to list in a short blog post, but I would like to mention three:

1.   He had an absolute passion for his work.  It was never about getting rich; it was all about making something he believed in.  He passionately believed in the Macintosh computer, the iPod, the iPhone, and the iPad to name just a few of the products Apple developed.  A recent survey indicated that 80% of Americans are not passionate about ANYTHING!  What are you passionate about?  Are you passionate about your work?  Do you find excuses to work late or come in over the weekend because what you do excites you?  Or do you even know what passion feels like? 

2.   He had an obsessive attention to detail.  There was a book written a few years back titled, “Don’t Sweat the Small Stuff… and It’s All Small Stuff.”  Jobs would have vomited his scorn on the author of that book.  Jobs was all about the small stuff.  “Good enough” was never good enough for Jobs.  Jobs was all about hiring the most gifted people he could find and then working them to their extreme limit.  Conversely he would also not hesitate to ridicule and quickly fire those who did not meet his high standards. He pushed and prodded his talented minions to perform at higher levels than they thought possible resulting in many technological breakthroughs that Apple is now known for.  He was absolutely ruthless on his employees but afterward they grudgingly loved and worshiped him for it.  How often do you settle for results that are less than your very, absolute best?     

3.   He was a “value creator.” He didn’t invent many things outright, but he was a master at putting together ideas, art and technology in ways that superseded what had come before.  Jobs once said, “Picasso had a saying, “Good artists copy, great artists steal” and we have always been shameless about stealing great ideas.”  Regardless of what we do for a living, our job boils down to adding value in the form of a product or service, for either our boss, if we have one, or our clients who are our ultimate bosses.  When we stop adding value, watch out, we’re expendable!  What can you do today to add additional value to your work so that your boss or client without hesitation realizes your importance in making them more successful?

I have heard people say, “Well I’m not Steve Jobs.”  Or they might insert another celebrity entrepreneur in that statement, like Richard Branson or Donald Trump.  Deep down what they are saying is that they don’t have the courage to try to be exceptional.  And I ask, “Why not?”  Being average is certainly not the road to success.  Yes, it is highly unlikely that we will ever be remotely as successful as Steve Jobs but should that stop us from living by the business principles that led to his great success?  I think not.     

Lessons from My Father

Even though my father passed away several years ago I’m surprised how often I think about him.  Something happens during the normal course of my day, and it triggers a flashback of him.  It wasn’t a conscious decision to think about him, but rather some random thing happens and instantaneously I’m transported back in time forty years hearing my dad say or do something.  It happens all the time.  Does that happen to you?

My father in many ways was a good role model.  He also had his faults but as time passes the good memories of him are winning out and the not so pleasant memories are fading.  I hope that’s what happens with my two adult children when I’m dead and gone. 

As I said my dad was a good role model, but he was a lousy teacher.  I don’t ever recall him ever trying to teach me an important life lesson.  He just lived what he believed.  At the time, I didn’t understand the importance or appreciate what I was witnessing.  It was just my dad saying or doing what he always said or did.  It was nothing special, or so it seemed.  It was just vintage Dad.  But the older I get the more I appreciate the values that he lived.   

So what life lessons did I learn from my father?

LIVE WELL WITHIN YOUR MEANS

Growing up my family lived in a very middle class neighborhood.  The neighbor on our left was a grocer and the neighbor on our right owned a gas station.  Although my mom drove new cars, I can’t ever recall Dad driving anything but used pickups.  A vacation to us was visiting our relatives, certainly not going to a destination resort.  We lived quite modestly.  It wasn’t until I was in college that it dawned on me that my parents were financially well off.  Over the years there had been hints of my parent’s wealth but I hadn’t been able to put the pieces together.  That changed when Dad, who owned his own CPA practice, sold his business and retired at the age of 50.  He lived quite comfortably for the next 30+ years off the income generated from his investments.

TREAT EVERYONE EQUALLY

After retiring, my dad spent most of his days working on his tree farms.  Having grown up in the rolling farmland of Iowa he was in awe of the beauty of the forests in the Pacific Northwest.  About ten years before he retired he bought a parcel of logged over timberland and spent his weekends nursing the land back to health.  He was very comfortable working alongside loggers, foresters, and other blue collar workers associated with the forest products industry.  And they were equally accepting of him as one of their own.   

I’m not sure why (it’s a question I wish I had asked him) but he was politically well connected in Oregon state politics.  I remember back in the sixties he was a pallbearer at a funeral where a fellow pallbearer was Mark Hatfield, the then governor of Oregon.  Dad never showed preferential treatment to his wealthy friends.  Those in a lower socio economic class were treated no differently than the rich and powerful. He treated everyone with the same friendly Jimmy Stewart like manner. 

PUT TOGETHER WIN/WIN AGREEMENTS

Dad didn’t believe in win at all costs.  He proposed agreements that were fair for both parties, not just for him.  He had no problem leaving a little bit on the table if it meant getting the deal done sooner rather than later and with both parties satisfied. Sometimes the person he was negotiating with would attempt to take advantage of his desire to strike a fair deal and would respond back with some unrealistic and unjustified counter offer.  You see, not everyone plays by the same set of rules.  But for the most part, people intuitively understood that he was proposing an agreement that was fair to both sides and they respected him for doing so. 

Sometimes life’s most important lessons are better absorbed not through formal instruction but by the consistent actions of a role model over a lifetime. 

May God richly bless you and your family during the holiday season.  Merry Christmas!