A re-run of Jerry Maguire came on the other evening, and Tom Cruise’s refrain “Show me the money,” made me think that I am overdue to remind everyone that life really shouldn’t just be all about the money. We are constantly reminded that life is dominated by economics. Whether we are watching the news – “It’s all about the economy, stupid,” reading a book, or screening a movie. The most memorable line from Wall Street, after all, is “Greed is good.” We are consistently reminded that success and happiness are unfailingly defined by dollars.
Hopefully, we teach our children other lessons like compassion, kindness, curiosity, a love of learning. I believe we were each taught these lessons. Even so, as adults, with adult responsibilities, many of our conversations, fears, and hopes center on money. As a business owner and leader of a creative team, I both intentionally and unintentionally reinforce this reality. I talk about the importance of budget management, of investment stewardship, of efficiency in design and project management, of the shared economic agendas of owner, contractor and design professional, and the link between meeting economic projections and project success – ad nauseam, perhaps.
While economic considerations are ubiquitously front and center, I am often reminded that it is NOT all about the money, and that periodically we need to take stock and reassess. Upon reflection, I cannot think of an architect, contractor or consultant whose career mission statement features a paragraph about making money. While cost and schedule are likewise part of an owner’s program, I’ve rarely met a client who decided to commission a private home primarily to make money. It’s a good thing when it happens, but equity growth is not the singular driver.
Occasionally, though, we buy into the capitalist frenzy, and our focus shifts from providing excellent professional service to a specific endeavor to monetize our success. A few years ago, we tried to do this by leading a real estate venture. The proposition was straightforward. We would, with limited partners and financing, purchase a townhouse – in this case in the West Village – renovate the property, and sell it at an outsize profit. A number of circumstances came together to make this the right time for such an adventure. The house and property were known to us; the real estate comps were current and compelling; and a good friend who was leaving the real estate bond and hedge fund industry would partner with us.
We were on a tight time frame, as the sellers had an attractive offer in hand from another developer, and we would have to move very quickly. We contacted another friend whose business it is to lend money to real estate developers on a short duration basis. Borrowing in this manner would allow us to make our offer directly, to proceed with the project, and afford us time to raise additional funds and to prepare plans.
We were taken aback, however, when we fully realized that the short-term debt expenses would significantly reduce the projected profit. More importantly, the cost of financing and the returns to our limited partners would each well exceed our interest in the property as developers. In a matter of days, we were reminded that successful projects often benefit the capital lenders and investors more than the creators and managers of the venture. In New York City, a finance-driven town, this is well known and even taken for granted – if not applauded.
Many good things came from this exercise. We were reminded that we need to use our talent and dedication to create projects that make sense from both a design perspective and within the context of our finance-biased culture; and that when we perform at our best, we will earn both creative validation and economic remuneration.
Instead of financial Hail-Mary plays, we are better served by focusing on the quality of our work and relationships. How responsive are our designs? How well are we managing projects? Are we empathic? When we perform our best, we succeed on all fronts.
In the end, the best way to ensure that money is NOT all that matters is to succeed at all the other things that do, and to be confident that relationships will flourish and of course, the money will follow.