WALNUT CREEK, CA—A number of today's most successfulcommercial real estate organizations were startedby entrepreneurial individuals in brokerage, development, privatereal estate equity and advisory businesses. Many of these firmshave well established operating and investment strategies thatguide the firm.

For example, a private equity firm may have raised funds frominstitutional investors and invests in apartments, office buildingsor distressed debt. Another may be a local brokerage firm thatspecializes in the sale of net lease investment projects andanother may be a real estate development consulting firm.

As real estate firms grow from one or two entrepreneurialfounders, they evolve with an established business strategy and acertain culture. In analyzing the operations of a company, manythink that the strategy of the company determines its culture;however, I posit that it's the other way around. The structure orculture of a firm determines its strategy. That is, the culturethat becomes embedded in the firm dictates its growth, hiringprogram, operational strategy and profitability. This may soundcounter intuitive, but it is true in many instances, especiallywith professional real estate service type firms.