I was honored to be invited to last week’s CEO Summit in New York. Those in attendance were tasked with discussing “The Future Of Real Estate.” It seemed like the perfect topic for a gathering of some of the brightest and most truly influential people in the real estate industry. Frankly, I felt a bit a bit out of place.
My day was pleasurably spent sandwiched between Rick Davidson, CEO of Century 21, and Richard Silver, Past-President of the Toronto Real Estate Board. Rick had the responsibility of teeing up the discussion about the changing face of real estate. He delivered a staggering list of demographic statistics.
“Majority of household formation in the US is being driven by Hispanic and Asian populations,” Nikesh Parekh, CEO of ActiveRain related in his recap. “The real estate industry does not reflect these demographic changes as Hispanics and Asians are a small percentage of the industry today, though growing.” Further statistics were given that indicated a tremendous shift toward a younger home buying demographic as well. It was an eye-opening wave of data that indicated the real estate industry needed an extreme makeover.
Nowhere was that more evident than in the room where this discussion was taking place. [pq align=right]Diversity at the CEO Summit could easily be defined as different sized, old white men.[/pq] I mean no disrespect. I’m one of those old white men. I just always find the discussion of diversity in an environment like that an interesting one. I think it’s difficult for a group dominated by white males to have a meaningful discussion about how to impact real change relative to diversity.
And while, as Nikesh indicated, each of the major real estate companies might be pursuing new recruiting strategies to diversify the agent base, this discussion highlighted the one missing element that would have made this CEO Summit even better than it was – action items.
And diversity was just one of the major topic areas that left me feeling this way. I’m sure I’m not the only one.
Don’t get me wrong, I told Brad Inman that the CEO Summit was a home run. I meant it. From my perspective, it was the best thing I’ve ever seen from an Inman conference. So, I consider the day a tremendous success, even without action items.
Maybe the goal of a summit like this is to leave you wanting more, to leave you asking, now what? Or what’s next? How much can you reasonably ask for from a conference anyway? Perhaps the goal of a summit like this is simply to inspire us to take action on our own. I don’t know.
What I do know is this, if I’m offered a seat at the next CEO Summit, I’ll gladly accept it, even if I my presence throws the demographic mix off. And Brad, if you’re reading this, congratulations. You’ve inspired me.
Yah woman are way under represented in the leadership too especially considering that 60% of agents are woman. We sell a butt load of real estate too but that isn’t what your article is about.
Well, it kind of is what my article is about. Ultimately, selling real estate is what this is all about.
Might be the first that I’ve heard of the diversity discussion not singularly wrapped in a generational flag. Fortunately, we have such a high number of female owned businesses leading our industry in every region, but how they influence the board rooms of our top brokerages might be a question we need to attack as well.
Do you feel the vacuum exists in our larger cities for minorities in the agent ranks?
There was a long discussion about the generational aspects of diversity, Kevin. It was a heated discussion as well, but the Rick did not try to wrap the entire discussion around age demographics. I think that specific flag is an interesting one, however, in shaping how leaders think and act. Too much of the conversation in the room focused on how to recruit younger agents and not enough on how to change in such a way that recruitment wouldn’t be an issue. What would a real estate firm need to look like to naturally attracted a diverse swatch of the American population?
You nailed it Jeff, embarrassing. We work hard to get that diversity on the stage at Connect and did same at CEO retreat but OWM dominate the industry.
I know this is something you care deeply about, Brad. I don’t know what role I can play in helping facilitate change, but I’m raising my hand.
Well said! good post for MLK day too (missed it by a few) I love Malcom Gladwell’s take on this,If you really want diversity, you have to immerse yourself in another culture, and that does take ‘action items’- one of the CEOs you mentioned has actually done that, many times, Jeff, you have done that- I’v done that too. In a third world country that can be challenging, and you do learn we are all the same- human. I didn’t attend the summitt, but I’m now going to watch that video- love this subject.
‘You and me both’ on the generational side of things, but I thought that your emphasis above did a good job of pointing out another area that we need to consider.
“…change in such a way that recruitment wouldn’t be an issue.”
One thought that seems to be distant from the trend, maybe old-school pre-1980’s brokerage in some ways… Could a greater infrastructure from the brokerage side (i.e. start-to-finish client management influences of KW systems, Ninja Selling, many others, etc), along with a stronger company-based implementation/execution presence (read: Brokerage = Firm, more leveraged spends, higher margins), and the *option* to hint towards the employee side of life vs. independent contractor-only (less money, more life) be something that stabilizes the real estate industry choice for young, diverse talent? Particularly at the onset of their interest, where we currently have something like an 80% turnover rate? By the numbers, we might actually be harder on new talent then either hospitals or public school classrooms.
For me, the diversity stats were very interesting, but not something the industry can’t figure out. I think the bigger point is best summarized by you in the comments here: “Too much of the conversation in the room focused on how to recruit younger agents and not enough on how to change in such a way that recruitment wouldn’t be an issue.” Fixing the model seems to the missing “action item” (wish I could tell everyone exactly what that is!) .. and the thing that could make the rest of the pieces fall into place.
I agree that the summit was great and honored to be representing the non-OWM.
Thanks Jeff for sharing this review with those of us who had no idea it happened. I just wanted to echo Sara’s comment about you identifying the bigger problem as one worth solving. Fixing, updating, breaking, and remaking business models to meet the ever changing business environments is something the real estate industry has been slow to do. The majority of the industry seems mired in a “when the market returns” mindset that they just plan to keep doing the same thing. The real problem is they expect different results. This is insane, literally. I’ve personally made it my goal this year to shine a light on the problem of business model design and share with everyone the proper way to think through this key process. Thanks again for summarizing this event.
What I find interesting is that “fixing the business model” seems to mean to most that something has to change about the way real estate agents get paid, or some industry shift in how it deals with buyers agency, or a change in how listings are owned. I don’t believe any of that to be the case. Maybe some of those things come at the end of the process, but starting with those assumptions is looking through the wrong end of the microscope. I know I’m preaching to the choir here, but I believe major improvements can be made to the “model” without having to break any of those things. Brokers need to evaluate who their customer really is, what real value they provide, and whether they want to continue to allow the “real estate agents are independent contractor” excuse to keep them leading in ways that could result in a purposeful culture of excellence.
Or look at it from the standpoint of “how do people want to buy” real estate services. Start there and build up. I think you have to break a few things to get there.
Right and right on. With so many product focused industries now shifting to service oriented business models with amazing results (like Apple, Amazon, IBM, even tee shirt of the month clubs); it’s more relevant now than ever before to break out of conventional thinking and generate a completely fresh business model. And it’s not just brokers who need to evaluate who their customers are, but also MLS’, Associations, Vendors, and the Agents as well. From that first answer, then can you begin to design VALUE for those ideal customers.
I’m not sure you do. Is it the “how they want to buy” that is broken or how they want to be treated, or what level of service they want, or how they want to find, or how much they want to pay?
Like Sara just said there is a ton of emphasis on recruiting younger agents. As a society we tend to favor men as leaders and the tradition continues but the men are getting younger.