Don't Play Referee, Part II

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My last post on "refusing to play the referee" generated some strong reactions—so I thought we'd spend a little more time looking at the situation.

Kathy suggested that companies should have commission-sharing guidelines that anticipate places where people are going to tangle and address them up front. Who can argue with that? Except, in my experience, commission plans and guidelines are a bit like legal contracts—it's simply impossible to anticipate every potential source of conflict in advance. And if you try, you are going to end up with a document that is measured in pounds instead of pages and that people will strongly resent for its complexity and length.

In his post, Amusis seems to assume that at the time of the conflict, the Staubach Company didn't have an "objective, reliable, and repeatable system for allocating commissions," something I have no way of knowing but which, after spending many hours there, I seriously doubt. Instead, I suspect that the situation arose in one of those gray areas where the commission guidelines didn't specifically spell out what should be done. Amusis sees Roger's admonition to "work it out between yourselves" as an abdication of his responsibilities as a leader. But having spent some time with Roger and his team myself, I think there is something very different at work here.

Coming from the team-oriented world of professional football of the 1960s and 1970s, Roger was shocked when he started in real estate by how selfish and egocentric a lot of brokers were. Rather than focusing on the needs of customers, he found the industry operated on the principles of "fees and me." Even today many commercial brokers represent both landlords and tenants—incentivizing them to maximize their commissions rather than to serve the real needs of their customers. That's why Roger chose years ago to focus on the tenant representation side of the business. Other brokers thought he was crazy. Why would he give up the landlord-side revenue stream that for some brokers makes up more than 50 percent of total revenue? Where others saw insanity, Roger saw opportunity. If he could build an organization that really served the needs of tenants and that avoided the conflicts of interest inherent in the traditional brokerage business, that would really mean something.

But to do that, he would have to build a different kind of firm—one where brokers would work together to support each other, share information, and put the needs of the customer above their own short-term drive for money. He introduced a number of innovations to help him do this, including the Staubach Constitution, which is a playbook of sorts for how to build a truly collaborative workplace, and the Staubach Guarantee, which allows clients to reduce the fee they pay to Staubach (to zero if they wish) if they believe Staubach hasn't produced enough value to justify the fee.

So which is it? Is Roger Staubach an enlightened leader or a conflict-avoiding abdicator? I think he probably spent too many years at the business-end of 300-pound defensive linemen for fear of conflict to be his problem. Instead, I see his strategy of making his brokers work out the issue themselves as a part of the larger tapestry relating to the unique kind of organization he was trying to build. Was he successful? I think his results speak for themselves.