JULIUS CAESAR HAD PROBLEMS. TRUSTED the wrong guys. So, years of beating the tar out of Rome's enemies to the north, south, and east couldn't prevent senators and tribunes of the Roman people from suddenly turning on the 55-year-old dictator. He'd crossed them in a thinly veiled bid, conspirators said, for deification. Tragically bad form, big time war hero or no. When a trusted friend advised him to ignore a silly superstitious soothsayer's warning on March 15, 44 BC, Caesar listened. He listened, partly because Brutus, the guy cajoling him out of the safety of his quarters that day was a man whose life Caesar had spared. Also, foolishly, Caesar believed he had a real shot at nipping the troubles his arrogance had caused in the bud by meeting with senators that evening in Rome's Temple of Venus. So, at the foot of the statue of Pompey, as dagger blades flashed, Caesar learned that being wary of the Ides of March actually meant keeping his guard up at least until midnight the morning of March 16th.
Still, as Plutarch and historians of the past two millennia have taken pains to point out to us, there's nothing really implicitly menacing or fundamentally foreboding about the Ides of March. Literally, the day that divides March in half was just a bad day for Caesar (and, by the way, hundreds of the conspirators involved in the assassination, whom Marc Anthony hunted down and dispatched mercilessly to the other world. Brutus did himself in.) Still, the Ides of March is not a bad day in and of itself.
It does fall in the middle of a month in which we look for first quarter financial reports from 13 of 21 large publicly traded production builders whose fortunes we follow quite closely. Yes, 13 of them, but that's probably only just coincidence, and has nothing to do with March being an unlucky or particularly risky month in the home building industry.
But what's the connection here? What do the Ides of March and Caesar have in common with the role of real and supposed risk in ever-growing home building enterprises that, stakeholders expect, must establish long-haul strategies without missing a beat on short-term financial performance goals?
Make no mistake, Caesar's hubris brought him to a bloody end, not his willingness to take big risks. As much valor, leadership, and tactical genius as Caesar displayed in his ascent to power in Rome, it became “all about him.” We've seen that mistake a few times since.
Strategies for home building empires necessitate risks. Big ambition, big risk. Some companies transform themselves around their mastery of calculated risk. Look at Standard Pacific, whom contributing editor John Caulfield profiles this month in “Mission Control,” Standard Pacific makes its turbo-charged growth in the past few years look almost too easy.
But when Standard Pacific chairman and CEO Steve Scarborough asserts that he puts “a lot of good people in place, and then get[s] out of the way,” it's not about humility or selflessness, but about a strategy that hardwires risk-taking into the company, an organization whose eventual magnitude is yet unknown.
Meanwhile, it's about trusting the talent, CFO Andy Parnes told me, in all the obvious ways. In this day and age, a venerable Irvine-based headquarters is there essentially to serve out financing support, risk management structure and a tech infrastructure, while the essence of the company lies with the people running its entrepreneurial divisional offices, buying land, and running projects. Since Scarborough and Parnes stepped up in 1996 into the roles they have today, Standard Pacific has transformed from a quintessential California home builder to a quintessential national home builder.
A common corporate career experience can easily fall into one's personal “worst nightmare” category. It's when your boss, in a previous life, had the same job you now have. The fact that Scarborough ran the company's Orange County division for about 17 years before he became chairman is precisely why he's willing to bet the farm on his divisional leaders. He knows exactly what they can do. When Standard Pacific reports Q1 earnings and results in April this year, the Ides of March will have come and gone as just another day. Probably because Scarborough trusts the right people.
Learn more about markets featured in this article: Los Angeles, CA.