The Medici Principle. A paper on Partnering and Specialization
Grubb & Ellis White Paper:
Practice Group Specialization
The Medici Principle
Glen Esnard, President
Grubb & Ellis Capital Investment Group
Senior Partner, CultureSync
"If you truly want a better life than you have now, do what it takes.
Otherwise, give yourself and those around you a break and just admit
that you don’t want to pay the price, that you’d rather whine and
complain than step out of your comfort zone and do what’s necessary
to make things better for yourself.”
- John Assaraf
Leonardo da Vinci was the last great generalist. He
was the last human being who knew everything there
was to be known, and by virtue of living when he did,
where he did, Leonardo da Vinci helped precipitate an
explosion of knowledge, power, and creativity that
ushered in the Italian Renaissance, pulled Europe out
of the Dark Ages, and, in that historic moment, birthed
the age of the specialist.
It is true; from the beginning of recorded history until
the Italian Renaissance, it was possible for one
person to know everything. However, that time
passed with Leonardo’s death. Leonardo was the
towering artistic and engineering genius in what was
later recognized as a golden age of genius.
However, contrary to common belief, Leonardo,
Michelangelo, Titian, Cellini, and all of the great artists
of the Renaissance era were not the ones who forged
that age. It was a powerfully aligned group of
businessmen, bankers, brokers and financiers who
made the Italian Renaissance happen.
The purpose of this paper is to explore the assertion
that we are now in a 21st Century neo-renaissance,
and that an explosion of creativity and wealth
production is going on around us, whether we
participate, or not.
What are you doing, right now, to set yourself up for
the next upsurge in the business cycle?
You must realize that the market has no inherent
interest in whether you succeed or fail.
Your success or failure is 100% your own personal
issue. What are you willing to give up in order to be a
Fact: The market doesn’t care.
The market only honors those who participate
As Frans Johansson points out vividly in The Medici
Effect; the Medici family, a group of bankers and
financiers in Florence, consciously created the Italian
Renaissance. The Medici family aligned on a vision of
what could be possible if they brought together, in
Florence, the most talented artists, writers, thinkers,
and practitioners in every known craft and field of
What would happen if the Medici created a living think
tank of all the best minds in Europe?
Back in the day, the Medici’s were challenging the
dominant merchant class of Venice, the military and
spiritual power of the Pope in Rome, and, the
mercenary army of the King of France. Just like
America in the 21st century, the Florentines’ in the
fifteenth century had a ton of crisis inducing issues on
As businessmen, the Medici’s were only tangentially
interested in art. They were primarily interested in
creating wealth through commerce, through market
penetration and domination. The times were hard, the
prospects dim. The odds were against the House of
Medici and the city/state of Florence to even survive.
The tactical and strategic business solutions that the
Medici’s invented were some of the most remarkable
applications in the history of business, and profoundly
The Medici group saw and aligned on a strategic plan
to capture power and primacy currently held by other
influence centers – in the mid-1400’s, that was  the
merchant class of Venice, who ruled global trade for
the previous 200 years;  the Pope, who had God on
his side, and;  the King of France, who was the
Pope’s rival, and, (according to the Pope) had the
devil on his side.
No matter how you slice it, either the King of France,
or, the Pope, or, the Venetians were going to devour
the Medici. Conventional wisdom counseled the
supremely gifted Cosimo de Medici to pick his poison
and ally with that. It looked like your basic ‘Middle
Desperate times call for creative solutions:
The Medici group saw that the Venetians, the Pope
and King of France were operating from what
amounted to an obsolete strategic business plan. All
of the Florentine opponents practiced dog-eat-dog
internal and external warfare. Even amongst allies,
there was no loyalty, no appreciation of the talent of
others, and no willingness to collaborate or share
knowledge. It was the era of the “Strong Man”.
Ultimately, that was the downfall of all three of the
Understanding their enemies’ fatal flaw, and having
this insight into the marketplace of the future of
Europe, the Florentines acted upon every available
opportunity to seize market share. They saw that it
was absolutely vital that they were they united in their
resolve and aligned in their business strategy. They
saw that they needed each other to survive, and
ultimately, to succeed. It was the first real expression
of mutual civic interdependency since several
hundred years before the fall of Rome.
In fact, the House of Medici group was so successful,
that their revolutionary business methods ultimately
united a warring collage of rag-tag city/ states into
what is now modern Italy, and furthermore,
standardized the Italian language.
He who controls the language, controls all.
The radical insight that the Medici group implemented
was to bring together specialized creative experts.
Cosimo de Medici, Founder of The House of Medici,
intuited that talented people, just being with each
other, created a piazza, an intersection in which
diverse ideas bumped into counter ideas, and led to
completely unpredictable and radically different
solutions to age old and newly evolving issues.
Just as Isaac Newton ‘discovered’ the Law of Gravity,
two hundred years later, Cosimo de Medici, and later,
his son Lorenzo, discovered in the mid-1400’s, a
powerful and simple business principle. Unfortunately
for most people, the power of the idea is largely lost
on most people to this day.
The Medici Principle:
The Medici Principle of bringing together specialists
and creating an, ‘intersection’ of collaboration is one
that is often taken for granted.
When principles are taken for granted, they are often
overlooked, and/or, ignored.
There is a cost to ignoring proven principles.
When the Medici bank provided this rich intersection
of ideas and skills, it caused an unprecedented
explosion of creativity for those who participated.
Think of it as the Medici ‘stimulus plan’.
The only other known period of history in which this
intellectual and artistic explosion of activity had
previously occurred was in Ancient Greece and
Rome, which is why the art, architecture, and
institutions of the Middle Ages look Greco-Roman.
The word renaissance (re-birth) refers to the re-
discovery of lost principles.
As far as we know, only about 450 people actively
involved themselves in this great social experiment,
the Italian Renaissance, over the course of about 200
years. And yet, what those 450 did with the re-
discovery of this basic human success principle
altered history and brought Europe out of the Dark
450 people prospered and contributed to their culture,
while tens of thousands slept through the opportunity
– largely because they failed to adapt, specialize and
Great art came along with the deal. Leonardo da Vinci
was a result of, not the cause of, the Italian
Everything Old is New Again:
Today, business is at a crisis point. The old is giving
way to the new in front of our eyes. The truth is; we
have before us a great opportunity to create wealth
The senior question on the table is Darwinian in
nature, and is a clear personal choice: Am I going to
adapt, specialize, and collaborate, or, am I going to
sleep through the business neo-renaissance that we
are experiencing and wake up in five or ten years to
find that the world has passed me by?
Regret is a bitch. (Just sayin’)
Flash forward to 1776. There was a lot going on, not
only in Philadelphia, with the birthing of a nation,
dedicated to the principles of life, liberty and the
pursuit of happiness, but also, in Scotland, a little
known moral philosopher, Adam Smith, was inventing
the field of economics.
Smith was the first to codify the law of supply and
demand, and spoke of the ‘invisible hand’ that guided
the marketplace. He also offered a case study on the
natural advantage of specialization. Smith showed
how one man could make a small number of pins a
day from scratch if he did all the work, but, if he broke
the job down into several components, he could
produce, with his team of specialists, thousands of
pins daily. Smith showed the power of leveraging
time, effort, and effectiveness.
Adam Smith was the original, ‘work smart, not hard’,
kind of guy. Though his insights, Smith taught the
average person how to become a millionaire.
Note: This principle of collaborative specialization is
only important if time, efficiency, transactional
volume, and profit are important. Otherwise, not.
Basically, if you did what Smith recommended, you
prospered and the market smiled on you. If you did
your own thing, you struggled. It was each person’s
choice to flourish or to struggle. And, the market
place, which didn’t care what you chose, sorted you
Poverty is also a bitch, so, people paid attention, and
modern business theory took hold.
“The law of cause and effect precludes ever having anything for
nothing. You must always pay a price for everything that comes your
way. The key is to determine what it is that you want and what price
you have to pay to get it. Then resolve to pay that price, or even
more, for this will bring you even more of what you want. You can
only reap what you sow.”
Dr. Walter Doyle Staples
Without throwing out the baby with the bathwater,
there are times when being a generalist is useful.
The trick is to recognize when it is good to generalize
and good to specialize. Business, particularly,
commercial real estate is never one size fits all. The
broker makes a living based on his ability to provide
the most effective solution for the client.
You must understand your role and be a special-ist as
a practicion-er, a general-ist as a solutions provider.
That means that when you are practicing, you are
‘special’. When you are referring and directing, you
are a ‘general’.
So, the ultimate name of the game is ‘collaborative
specialization’, a simple principle that was adopted
long ago by those who are universally recognized as
being the best, brightest, and most highly professional
members of the culture. That would (still) be the
lawyers, doctors, and leading businessmen.
The Collaborative Specialist Service Model:
Law – The client approaches their family lawyer with
an issue that is not the attorney’s specialty. The
lawyer brings in specialists to provide the appropriate
solution and often oversees or directs the case. Often
the lawyer keeps his hand in to manage the client
relationship, which is to say, the client’s mind.
Business deals often represent something far beyond
profit for the client, and that has to be taken into
All good firms have a broad platform of specialists,
that’s the power of ‘inside’ relationships. The
specialists themselves do lots of internal marketing,
looking for more connections to ‘go to’, and to whom
they can provide their specialty.
Medicine – Your family doctor refers you to
specialists. Your doctor completes his early diagnosis
and refers you to the ‘best in class’ in his group –
(really, the ones he knows) If your doctor is in the
Kaiser Permanente Group, you can be sure that the
specialist will be in the KP group as well. The
relationship comes full circle when the specialist
refers people back to the family doctor. The patient is
referred as is appropriate to the treatment.
Imagine that you want Lasik or Radial Keratotomy.
You want to see without glasses. You go to an
Ophthalmologist who examines you and recommends
you ‘as a candidate’ to an eye surgeon.
(Imagine if someone in need of a real estate solution
was recommended to you as a ‘candidate’ for your
services. It happens. Just not to you.)
The first thing that happens in eye surgery is that you
sign your eyes away, and give up right of legal
redress if something goes wrong – which it does in a
small percentage of cases. Even though the
probability is that you will have successful operation, it
gives one pause.
In a case like eye surgery, you want the person who
has done the same operation 8000 times, not the
generalist. The surgeon better be good.
What’s the difference in expectation of client in the
matter of leasing, buying, or selling a parcel of
property? The client wants the specialist. This deal is
like his eyes, to him.
It’s Specialization + Consistency, Stupid:
In addition to the expectation of ‘best in class’, the
client also demands ‘consistency’. In today’s market,
they want ‘the Starbuck’s experience’. That means
not only the same cup of venti, decaffeinated, skinny
soy latte, they ALSO want the ambiance and
experience of every Starbuck’s whether in Seattle, or,
The entire service experience is a touchstone that
gives confidence to the client. Consider that when you
are doing the deal on behalf of the client, they feel
somewhat powerless and fear that something will go
It is your job to plug the client into the consistency of
the experience whether in Seattle, or Omaha. You not
only need a network of specialists in your local
market, but also, regionally and nationally, as well.
After all, that’s how you represent yourself and your
firm, and unless you can effectively deliver a team
that is plugged in on many levels, you will never get to
the important deals.
If the deal has any level of magnitude, you better
have specialists on board. It is pure hubris, not to
mention delusional, to think that you can personally
cover all of the bases. And even if you don’t get it,
your client does, and you have irrevocably damaged
Here’s the thing:
They won’t tell you, they just won’t hire you. That’s a
If you have lost more than one engagement to a team
that looked better equipped to manage the clients’
mind, this communication is directed at you. You need
The name of the game for client is risk management,
especially in today’s business climate. No one will
take a ‘lonesome cowboy’ seriously in this day and
age. Not since the Renaissance, really, as the
Medici’s taught us.
We live in a world that demands collaborative
specialization. The thing is; you gotta’ be good, and
you gotta’ get along. Unconscious and unprofessional
behavior is ruthlessly dealt with.
Again, the market doesn ’ t care.
So, it behooves the ambitious broker to get with the
Looked at from a professional point of view, Real
Estate, Law, Medicine, and Starbuck’s are all dealing
with the same issue; the client relationship. The
obvious solution is organizing oneself to provide
‘consistent’ and ‘best in class’ service across the
The Business Opportunity:
The business opportunity is in seeing that some do it,
and by far, most do not. Some companies are famous
for this kind of collaboration – Lexus, Harvard MBA,
Starbuck’s, Kaiser Permanente, Pixar, Apple iPod,
Disney, Coca-Cola. But most don’t - GM, Chrysler,
the majority of those with an ordinary point of view
who think ‘good enough is good enough’.
Likewise; some brokers are famous for offering a
collaborative specialty business model that promises
consistency, most are not. The latter sounds dumb,
and it is, but, oh well… it’s only your career.
Leadership guru, Warren Bennis, once famously
wrote, “You don’t know who the best butcher is, but,
your butcher does.” By that token, your client doesn’t
know whom the best specialist is, but you are
expected to. That’s why they came to you.
What to do:
 Build reciprocal professional relationships with
people who are ‘best in class’ and whose strongest
game differs from yours.
 Work out the broad strokes of your deal before you
need their services. Do the specific background deal
on a case-by-case basis.
 Find out from your new ‘partners’ who is the very
best at do what they do in areas outside of your
 Build a collaborative specialist relationship with
that person, introduce him to someone he should
know and have him reciprocate.
 Lather, Rinse, Repeat.
Create a new intersection of energy and influence for
yourself and your client. Study collaborative
specialization. Be a modern day Medici. Start a
modern day Medici group.