Due Diligence #2
Bex Ferrante turned out to be about fifty, built by twenty years of walking buildings, in a fleece with a property logo on it that had been washed until the logo cracked.
She had run a nine-hundred-room convention hotel in Chicago for fourteen years and had been, she said, extremely good at it and extremely tired.
She did not ask Jo about herself.
She said, “Right, come look at this,” and took her to the whiteboard, and for forty minutes the two of them argued about the Chicago properties.
It was the best forty minutes Jo had spent in a year.
Ferrante disagreed with her. She disagreed on the Chicago sequencing — she wanted the worst building second, not first, because the general manager there was six weeks from resigning and you could not run a rebuild through a GM who was leaving.
She had the resignation on no evidence at all except that she had spoken to the man twice and knew the sound of it.
She said so plainly, as a professional judgment with a confidence interval attached, and she said, “You’re right about the principle and I’m right about this building,” and Jo found, testing it in her mouth afterward, that she agreed.
Nobody had disagreed with Jo about the substance of anything in five months. People disagreed with her about scheduling.
“Try me on Hartford,” Jo said.
“Hartford’s fine.”
“Hartford’s not fine. Hartford’s the one you’ll all still be arguing about in March, because it looks fine and it isn’t, and by the time it’s obviously not fine you’ll have spent the year-two money.”
Ferrante put the cap back on the marker for the second time.
“Say why.”
Jo said why. It took four minutes and involved a franchise term with an unusual reset provision that she had read on a Sunday night in her own bed, and Ferrante listened to all of it with her arms folded and her head slightly down, and at the end of it said, “Corinne. Come here.”
Lasker came.
“Say the Hartford thing again.”
Jo said the Hartford thing again. Lasker listened to it with no expression whatsoever, which Jo had by now decided was simply her face, and at the end said, “That’s the fourth time somebody’s raised Hartford with me and the first time anybody’s said why.”
“It’s in the document.”
“It’s on page forty-one of a document nobody reads past the schedules.” Lasker looked at Ferrante. “This is what I meant.”
“I know what you meant. I’m standing here.”
“You said I oversold her.”
“I said you oversold everybody, which you do, and that I’d decide for myself.” Ferrante turned back to the whiteboard and rubbed out a date and wrote a different one. “I’ve decided.”
Nobody offered Jo anything. Nobody made a speech. A date got changed on a whiteboard because of a thing she had said, which was, as far as she could work out on the freight elevator afterward, the first time that had ever happened to her in her life.
“You’ve done the model,” Ferrante said, at some point.
“I’ve done a model.”
“You’ve done the model, because you just told me the year-two capital number without looking it up and it’s the number.” She capped the marker. “How long did it take you?”
“Four hours.”
“On a Sunday.”
“Sunday night.”
“Mm,” said Ferrante, and gave her a look that Jo knew from the inside, because it was the look she gave people who turned out to be worth the time, and she had never once been on the receiving end of it. “Corinne. She’s done the model.”
“I know she’s done the model.”
“You didn’t tell me she’d done the model.”
“I wanted you to find out,” Lasker said, from the other side of the room, without looking up.
Amit Raval came in at ten past seven with a laptop under his arm and the irritation of a man who has been in a meeting he did not respect.
He was the finance director. He was younger than Jo expected and had the tie of a person who had been somewhere formal and resented it, and he put the laptop down, said “You’re the ops candidate,” and opened it, and turned it around.
“Before you get the sales version. This is the actual year-one model. Not the deck version, the one with my assumptions in it, which are worse.”
Jo pulled the chair around.
He walked her through it and it took twenty-five minutes and he did not simplify anything.
When she asked why the Northeast properties carried a higher management fee he said “because the contracts are bad and we couldn’t renegotiate before close,” and when she asked whether they had priced the renegotiation into year two he said “no, and I’ve been losing sleep about it,” and when she said she thought the sensitivity on occupancy was optimistic by about two hundred basis points he stopped and looked at the screen for a full ten seconds.
“Say that again.”
She said it again.
“Where.”
She showed him. He typed. The number at the bottom got worse.
“Huh,” Raval said.
He sat down properly for the first time since he had come in, which Jo understood, from a distance of about four feet, to be the entire compliment she was going to get.
“Where else.”
“Sorry?”
“You found one. People who find one find three. Where else.” He turned the laptop back toward himself and then, after a second, turned it so they could both see it, and moved his chair. “Go on. It’s not a test, I genuinely want to know before Thursday.”
So she went on.
She found two more. The first was small and arguable: a payroll ramp that assumed property-level hires landed evenly across the year when every operator Jo had ever watched hired in a lump before the season.
The second was not small at all. There was a line for the franchise reset on the Hartford property sitting in year three, and it should have been sitting in year two, because the reset ran off the anniversary of the management agreement and not the calendar year, and if it moved then the whole year-two capital envelope had a hundred and forty thousand dollars less in it than the model said.
Raval looked at it for a while.
“That’s the thing Bex has been shouting about.”
“She’s been shouting about the operational side of it. This is the money side. They’re the same problem.”
“They’re the same problem,” he repeated, and wrote it down, and underlined it.
“Right. I’m going to need you to say that in front of Corinne, because when I say it, it’s finance being difficult, and when Bex says it, it’s operations being difficult, and when the two of us say it together everyone assumes we’ve agreed something in a corridor. ”
“And when I say it?”
“When you say it, it’s the third person independently arriving at the same place, which is the only thing that ever moves anybody.” He shut the laptop. “That’s not flattery, by the way, that’s just how boards work.”
“I know how boards work.”
“Yeah,” said Raval. “I noticed.”
He did not thank her. He did not say good catch or nice one or any of the things men said to Jo in meetings when she found something, all of which were compliments and all of which located her outside the work.
He changed the assumption, saved the file, and said, “Right, so that’s the Q3 conversation ruined, thank you very much,” and then went straight on to the next tab, because there was a next tab, and because she was somebody who was going to be in that conversation.
That was the moment.
Jo would come back to it later and try to make it something bigger, and it would refuse.
It was a man not thanking her. It was the absence of a compliment.
It was being treated, for twenty-five minutes on a Tuesday evening in a half-built office, as a colleague rather than as a remarkable assistant, and the difference between those two things turned out to be the size of a life.
She had been correctly valued exactly once, and it had taken a stranger with a spreadsheet twenty-five minutes.