The Strengths and Limitations of Equity as a Teambuilding Tool
In my time working in film finance, I've come to appreciate the motivating power of finder's fees. When someone has a stake in someone else's success, it's only natural that they're more active in helping. On the other end of things, when one person succeeds, and his or her team has a share of that success, the team prospers.
With business acquaintances, I find this idea is easy to get across. People understand and respect it. The only challenge is when you try to use it t motivate someone who doesn't have their own, independent reasons for taking action. Equity can make someone who's willing to work perform with much greater focus and determination, but it won't motivate someone who doesn't already see the value in what you're doing - personally as well as professionally.
Strangely, when I try to bring that same methodology into my more personal business relationships, and reward people who offer to help me out of kindness, one of two things tends to happen. Often, folks will back away from the offer of money, feeling that it somehow demeans their kindness to accept it. Even folks who have offered me that same favor have balked at the idea!
Like I said, to me it's just good teambuilding. If I succeed with the help of my friends, why shouldn't they see direct benefits? I fully recognize their kindness, and that's part of why I work with them in the first place. Establishing that give and take is good, because it creates tangible evidence of interconnectivity, and incentivizes people to look out for each other going forward with more focus and specificity.
Other times, people become afraid that I'm going to cheat them out of whatever percentage I've just offered, and whatever favor they'd offered in the beginning gets bogged down in drama as they try and calculate the value of their stake, and to ensure they recieve it. Clearly, this response is a product of the culture of powerlessness prevalent in Hollywood. It's obnoxious, but I see where the fear comes from. Frankly, if someone's inclined to get that worked up over those kinds of details, they were calculating what they could get from me all along, and their panic would have killed whatever was being achieved sooner or later. You can't work with paranoid people. In the end, no assurance is complete. People who want guarantees aren't decision-makers. No risk, no reward. That, I handle by just walking away.
It's the first thing that perplexes me. Yes, I work with my friends because I trust and love them. At the same time, we are making movies. At some point, they will expect to get paid, right? Their blood, sweat, and tears will be rewarded at some point, right? When I'm making hundred million dollar movies, will they work for free on those?
Why not begin that relationship in a way that only costs us what we can afford, rewards quality results over all else, and establishes in a clear way how our success is intertwined? Doesn't that increase the trust?
I know it does, in my case. That kind of pragmatic interconnected teambuilding is what makes my best business relationships as strong as they are, and it's what brings production value to independent films without a lot of cash to blow. It's good for the product, and it serves as a constant incentive for those behind the product to work together as a cohesive team.
What it requires from the participants is the willingness to receive wealth for their efforts. It requires the knowledge that money is a reward and a tool for doing good works, and that receiving it elevates their efforts, rather than demeaning them.
Peoples crazy ideas about money are a conversation for another time! Suffice it to say, if you're making movies, the stuff comes in handy.
With business acquaintances, I find this idea is easy to get across. People understand and respect it. The only challenge is when you try to use it t motivate someone who doesn't have their own, independent reasons for taking action. Equity can make someone who's willing to work perform with much greater focus and determination, but it won't motivate someone who doesn't already see the value in what you're doing - personally as well as professionally.
Strangely, when I try to bring that same methodology into my more personal business relationships, and reward people who offer to help me out of kindness, one of two things tends to happen. Often, folks will back away from the offer of money, feeling that it somehow demeans their kindness to accept it. Even folks who have offered me that same favor have balked at the idea!
Like I said, to me it's just good teambuilding. If I succeed with the help of my friends, why shouldn't they see direct benefits? I fully recognize their kindness, and that's part of why I work with them in the first place. Establishing that give and take is good, because it creates tangible evidence of interconnectivity, and incentivizes people to look out for each other going forward with more focus and specificity.
Other times, people become afraid that I'm going to cheat them out of whatever percentage I've just offered, and whatever favor they'd offered in the beginning gets bogged down in drama as they try and calculate the value of their stake, and to ensure they recieve it. Clearly, this response is a product of the culture of powerlessness prevalent in Hollywood. It's obnoxious, but I see where the fear comes from. Frankly, if someone's inclined to get that worked up over those kinds of details, they were calculating what they could get from me all along, and their panic would have killed whatever was being achieved sooner or later. You can't work with paranoid people. In the end, no assurance is complete. People who want guarantees aren't decision-makers. No risk, no reward. That, I handle by just walking away.
It's the first thing that perplexes me. Yes, I work with my friends because I trust and love them. At the same time, we are making movies. At some point, they will expect to get paid, right? Their blood, sweat, and tears will be rewarded at some point, right? When I'm making hundred million dollar movies, will they work for free on those?
Why not begin that relationship in a way that only costs us what we can afford, rewards quality results over all else, and establishes in a clear way how our success is intertwined? Doesn't that increase the trust?
I know it does, in my case. That kind of pragmatic interconnected teambuilding is what makes my best business relationships as strong as they are, and it's what brings production value to independent films without a lot of cash to blow. It's good for the product, and it serves as a constant incentive for those behind the product to work together as a cohesive team.
What it requires from the participants is the willingness to receive wealth for their efforts. It requires the knowledge that money is a reward and a tool for doing good works, and that receiving it elevates their efforts, rather than demeaning them.
Peoples crazy ideas about money are a conversation for another time! Suffice it to say, if you're making movies, the stuff comes in handy.
hey enjoying all ur posts...yes i do think that there is an unhealthy culture around money, and i like the way you break down the people who are uncomfortable by you offering money...gave me something to think about as i try to change my attitude towards money and prosperity.
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Interesting view, When you speak of compensation you only bring up money. What is your outlook on an exchange of labor or services. More of a bartering of skills then a collection of funds. I find a willing hand is worth far more than the fist full of dollars it holds. I agree with you and the system of reward for a job well done. Hard work should be compensated but as you wrote earlier, motivating someone that doesn't have a direct reason to assist (independent or not) is difficult. The question I raise is, If someone is in a position to help or has come to you offering help, hasn't there been a motivating factor already? Perhaps the most easy to detect is the need for monetary compensation but perhaps they balk at the money because they were hoping for a different outcome, something that would apply to the motivating factor that first brought them into your sphere of influence. It may not be the attitude toward money that causes them to balk but the distance in which the compensation missed the target that backs them off.
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Great question. Farther is a short film that cost me about 5 grand, and the production value is well over a hundred grand - most of which I got on the back of a screenwriting gig. Through that process, I learned two things that, in hindsight, were pretty clear to begin with.
On the one hand, people perceive the value of goods and services as subjective, compared to money. I don't want to use specific examples because the people I worked with don't want it known that they worked for barter, which is a clear sign that they felt they were doing me a favor just by entertaining the notion! If you give someone one service for another, they are free to evaluate the cost or value of that service to you, and the value of what you get in return will be pretty arbitrary. For the most part I was lucky, but it would have been easier and less stressful just to pay cash, and "get what I pay for."
Secondly, everyone puts work for cash in front of work for barter, no matter how much value you give them. Folks feel entitled to work for that next paycheck. Since most people worth hiring are getting a steady stream of work for cash, it might be a very long wait before your work gets done. Your best bet is to give them the check they're entitled to, even if it's not a big one.
Conversely, offering contingent compensation like equity takes a motivated person and gives them a concrete value for their work, even if that value can fluctuate. What they receive is directly related to the value they put into the project. In other words, the better the movie is, the more people will pay to see it, and the more money everyone who's working on it will make. As a result, they tend to invest more work into the project than they otherwise would. They're working for a paycheck which may not be up to their standards, but they're also working for a lot more money down the line, the amount of which depends heavily on the quality of their work. It's a good incentive, and people with strong financial goals can see the urgency in that kind of work, OVER the day-to-day job stuff. They're working for the future, as well as the present. They're not working to pay the bills, they're working for the things they've always wanted.
In my experience, working for barter is a favor, and is treated as such. Working for a paycheck is a job, and is treated as such. Working for equity is an investment, and is generally treated as such, but only by folks who see the value in the investment, and only by folks who know that there are better ways to make money than the "job mentality" allows for.
Favors are great, but most people get frustrated when a favor requires the extra mile. Working on a barter system isn't much different, and except for rare, special cases, I don't plan to work that way again. That value of what you're giving is too fuzzy for today's economic mindset, and people are liable to be fuzzy with what you get in return.
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Of course, you have to offer your colleagues a project that's likely to make money for that approach to have any value or impact.
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Lastly, I completely agree that someone willing to do you a solid absolutely sees value in the work you're doing. Offering them money, in my opinion, should be seen as a way to allow that work to feed back into their lives in an even more holistic way.
I've shown up on filmsets just to help, and gotten a check I didn't feel I needed at the end of the day - that's abundance! It's not like the money is more or less able to serve my goals than any other money, and if they had felt unable to pay me, they wouldn't have. It was their way of making sure the value of my time there was magnified, and it made me more conscientious of exactly HOW I spent my time on set in the future. Everyone got more value, and I'm sure the film was better as a result.
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