Concho Minick is the former long-time President of Billy Bob’s Texas, the historic and world-famous entertainment venue in the Fort Worth Stockyards. He is credited with transformation of the institution into its viable modern form. Concho is now the CEO of Christie’s International Real Estate | ULTERRE which is a commercial and residential real estate brokerage with operations across the Dallas Fort Worth area.
Lessons from the Honky-Tonk
By Concho Minick
The Introduction to this series and Part 1 of 5 can be found here: Pt. 1 and Intro
Part 2 of 5: Conflicts
“Remember that most people will pretend to operate in your interest while operating in their own.”
― Ray Dalio, Principles: Life and Work
One of the items definitely not on my initial due diligence list prior to taking on the role as President of Billy Bob’s Texas was ownership of the URL/web address. Let’s try to quickly illustrate via quiz:
You are asked to lead a company that drives a massive amount of revenue and traffic through its very obvious and well-known web address. While revamping the underlying website, you discover that the URL is owned by the spouse of one of the owners. Further, it is held in an entity to obscure ownership and provide a liability shield for any wrongdoing. You should …
A. Wake up and realize you are trying to make a living at a honky-tonk. Run for your life.
B. Notify all the partners in the business. When the partner, who is the spouse of the rogue web address squatter, tells you he is not going to assist, adding “it just might be worth something someday”, pull your boot gun and empty it. Re-load.
C. Proceed to the nearest bar and don’t leave until you perfect your own personal margarita recipe. Uber home.
D. All the above.
Obviously I didn’t choose “A” (more detail on “B” and “C” in the book). So where did I go wrong here?
Approaching an investment opportunity or a role as a professional manager or partner in a business with a due diligence list containing items as granular as URL ownership might come across as paranoid. However, it is easy these days to imagine the growing importance of digital assets and IP in our world of tech disruption. In this case, the URL was (and continues to be to this day) very important – and much more so than for businesses that do not derive direct revenue through their website.
Deep analysis is going to yield evidence of such conflicts in every business. It may not be as outlandish as what happens at Billy Bob’s Texas, but you will experience it without doubt. And if you take a quick two-step through the business literature, you will find a rich collection of works that address conflicts in the workplace. You will see volumes on conflict between people and business units, dispute resolution mechanisms, and many explorations as to the how and why of conflict. In a blog published just last week, Katie Shonk at Harvard penned a most insightful comment, “Conflicts often tap into our deepest sense of our own identity.”
The idea of our own identity driving conflict is powerful and penetrates virtually all forms of the problems that can arise. To be sure, at Billy Bob’s all forms of conflict were on stage – nepotism, romantic, financial, sweetheart deals, confidential information – you name it. But what I would like to dial into here for the benefit of the reader is Conflict of Interest. While many varieties and technical definitions exist, the most universal way to describe the concept might be – A BUSINESS STAKEHOLDER HAVING A COMPETING INTEREST OUTSIDE OF THE BUSINESS.
Keep in mind the competing interest may be a very personal one for the stakeholder – not just another business venture or a relationship at City Hall. They all count and can be equally debilitating. When the record scratches here – listen very closely. When a partner has a clear, straight-up economic conflict, you can rest assured they will attempt to maximize their economics.
At Billy Bob’s I had a small subset of very creative partners who shared the same wonder about brand potential as me. One of the ideas we tried to bring to the world early on was the Billy Bob’s Texas Hotel. Seemed like a natural – no abundance of good hotel rooms in the Fort Worth Stockyards, great business expansion on our hospitality expertise, not an overly complicated business model. We would be crazy NOT to do this.
There was just one problem – conflict of interest. One of our other partners had a hotel in the Stockyards and did not want to lose business to a new Billy Bob’s hotel. We didn’t foresee the partner invoking the unanimity requirement in our company agreement for major decisions to prevent such a great opportunity from taking flight. There was something else afoot.
As time went on, more and more conflicts of the partner became obvious and that the visions of a Billy Bob’s Texas expansion were not shared, and even actively opposed. Billy Bob’s was going to be operated to facilitate the growth and success of competing businesses owned by that same partner and his new partner from California. The great brand of Billy Bob’s Texas which we were preparing to send to various parts of the globe was now subordinated to the interest of a local real estate development play. It all happened because of conflict of interest.
At Christie’s International Real Estate ULTERRE, we work diligently to avoid conflicts of interest. Naturally it helps to be buoyed by a wonderful culture. Our major economic pathways line up very nicely with our stakeholders. Agents are serving customers and our operators are providing uncommonly committed support to those agents. Our partners are also engaged in the success of all elements, and the global Christie’s organization is a stellar supporter of their Texans. That being said we still look through the lens of conflict when evaluating new possibilities.
What I have not seen is a great framework for identifying and thinking through conflicts of interest before getting into a transaction or an employee/employer situation. Some might ascribe this to the realm of common sense. Fair enough. However, I think a careful review in this area may benefit the overall trajectory of a business (or employment opportunity) all the way through to its conclusion.
Let me try to bring forward this lesson from the Honky-Tonk on conflicts of interest in a way that hopefully benefits those lacking this element of common sense (like me) and those analyzing business opportunities at a deeper level …
- Build up a story of the major economic pathways for growth (business or professional) and document thoughts on what could stand in the way.
- Write down a list of stakeholders covering at least – suppliers, customers, employees, government, community, financial (e.g. investors/partners) – and write a list of their motivations.
- Identify conflicts from the intersection of bullets 1 & 2.
- If a barrier to a good outcome emerges – PAUSE – it is time to think through the ultimate endgame.
- Repeat the process for every significant new opportunity.
If you are already engaged in the business situation then a good strategic planning process will help identify these sorts of issues. Either way, this is not about getting vapor locked on the potential negatives. You must go where the pain is to resolve differences. This is perhaps the biggest opportunity for sustainable value creation. Work very hard on this and what you learn will bring into focus alignments and divergences on the path to monumental success.
“You must go where the pain is to resolve differences. This is perhaps the biggest opportunity for sustainable value creation”
At Christie’s we attempt to think expansively and to not have a fixed (or capped*) mindset. Our common goal is to explore the limitless boundaries of success together with as few conflicts as possible. We think of it as an exercise in potential – with help along the way from the honky-tonk.
* Yes this is a shot at capped fee brokerages for you real estate brokerage folks.