The Question from Michael McClure:
“Here’s a topic I’ve enjoyed discussing many times with many people: is the “employee” brokerage model viable in real estate, and – on a related point – is there any correlation between the predominance of the independent contractor model and the overall level of professionalism in real estate?”
My Response:
People love to blame “the model” and the independent contractor status of the individual real estate agent on the inability of real estate brokers to lead. Furthermore, they blame this model for keeping a truly consumer-centric brand from being established. I think it’s crap.
Where there is no vision, the people perish.
The real culprit, at every level, is an almost complete lack of vision, no clear, actionable values, and a misguided understanding of what brand really is. Our values are our true brand. Real estate agents aren’t following brokers because no one is giving them a good reason to follow. And if they did follow today, where would they be lead?
I’ve been pondering writing this post for a few weeks and a discussion on yesterday’s Harvard Business Review chat gave me the motivation I needed to actually do it. It is a conversation I’ve been having in depth for many years. The chat was dominated by a discussion of leadership, specifically as it related to vision and values. The need for a strong, unifying vision was not debated. The only real debate was whether this should come from a single voice – a strong, visionary leader – or whether it required a community/organizational effort to create. I don’t believe everyone can be a visionary, but I believe everyone wants to be associated with a strong vision.
Jesse Oguntimehin – @JesseOguns
.@joesat I may not be visionary, but work on a team after being sold on an awesome vision. @redtype #HBRchat
Another strong theme was that a clear vision is only the starting point.
Cathryn Hrudicka – @CathrynHrudicka
RT @sanchezjb: A3 Secondly leaders recruit, develop, & recognize ppl whose values & experience reflect the orgs purposeful culture. #HBRchat
The responsibility of leaders.
This deserves repeating: Leaders, real leaders, “recruit, develop and recognize people whose values and experience reflect the organizations purposeful culture.” The problem with most real estate brokerages is that they have no clear vision and have not articulated a set of core values. They have no chance of creating a “purposeful culture.” And that purposeful culture is where “brand” is really born.
A definition of brand: A commonly held set of beliefs about WHAT you deliver and HOW you deliver it. This was shared with me years ago by my mentor, Bill Leider. I think it’s critical to understand that the HOW of the delivery is what is completely in control of the broker who has set a clear vision and established a set of values that THE BROKER can live without fail on a daily basis. Actionable shared values are not just pretty words on a poster. Values are the dark matter of human relationships and the key to building an ecosystem that manifests those values. This is also NOT model dependent. It simply demands that the articulated values play a key role in how a business is run.
Raj Datta – @rdatta
Yes, at the core are core values, but then around it practices, policies, systems – an overall ecosystem that manifests the values #hbrchat
Core values spell out the intent, whereas the ecosystem turns the intent into observable behavior #hbrchat
Observable behavior. Like great parents, great leaders lead by example. The ecosystem is squarely in their control. The fact that agents are independent contractors is not the reason why brokers can’t lead. It’s the real estate broker’s view of their agents and their view of their role in their own organizations that keep them from leading effectively.
If this is to change, a decision has to be made at the broker level to CHANGE how THEY view agents, how they interact with agents, and what responsibility they have to their success. That begins with a shift in their thinking, their own psychology. This behavioral change on the broker side will trigger new psychological responses from the “independent contractor” side. I think it’s possible to alter the psychology, even without a change in the fundamental nature of the relationship. And the result would be a complete change in how value is delivered.
Koraan Jamar Kenner – @KJKenner
@HBRexchange the how? create layers of thick value, w/ core mission th@ aligns w/ products/services; enter shared econ w/ sim biz’s #HBRchat
Translation for real estate? Real estate brokers need to create thick layers of value, guided by a shared core mission (vision), driven by a clearly articulated set of values and aligned squarely with the products/services desired by their clients. This is completely within their control, despite “the predominance of the independent contractor model.”
Why is there is a lack of professionalism in real estate? Because leaders are not leading, they’re wandering. Period.
Of course, you’re opinion may differ. I’d love to hear it.
photo credit: MikeBaird on Flickr
Jeff,
Great post, Jeff, and I totally agree.
And that’s exactly why we have a specifically articulated set of Mission Statements and Core Values at the company that I founded, Professional One, which you can read at http://www.professionalone.com/careers/Mission-Statement.pdf.
Rather than write another 1,000 words, I’ll simply say this: you are correct…
Best,
Michael
Amen. Why does the brokerage environment lack the leadership and expression of values that you are referring to here? I think you are dead on, but I’m just trying to understand why. Pondering… I can think of very few examples, and they tend to be smaller, boutique type operations.
Question for y’all, somewhat related to Linsey’s question…
Does professionalism pay?
It’s a serious question. Not “should” professionalism pay, or “i would pay for it”, or “my clients hire me for professionalism” or whatever, but at the company level, does professionalism = higher revenue & profits?
I believe it does, Rob. In every instance I’ve seen where a quality company has articulated a clear, desirable vision and instituted ACTIONABLE values, not just pretty words on a poster, there has bee great reward for that company. HBR is littered with case studies.
I don’t mean HBR, or companies outside of RE. There are numerous peculiarities of this industry that makes me wonder if professionalism pays.
The big complaint in the RTB crowd is that the “big box brokerages” with their low standards are screwing things up. Question is, if professionalism pays, why aren’t these little guys like Krisstina and Michael just eating up marketshare like nobody’s business?
If lack of leadership –> lack of professionalism –> lack of financial results, then why are the big brokers pulling in billions in sales, while the “high standards” brokers are pulling in millions in sales?
How do we explain this particular gap in real estate?
Jeff ..
I say Yes. It IS possible to have a 5-star consumer-centric brokerage with Independent Contractors. I can say this because my firm, The GoodLife Team delivers a consistent 5-star reviewed experience to our customers in every transaction with every one of my 20 independent contractor real estate agents in my company. (Minus a mishap here and there). You can look to our public, Zillow and Google Reviews for proof.
How?
The answer is simple. To your point, it requires having Core Values.
Now, many companies HAVE core values BUT that’s about it. They can be pointed to on a wall somewhere in the bricks and mortar office, but that’s about the extent of it.
First, I only hire to my core values. If an agent, no matter how much they produce, doesn’t match my core values, I don’t hire them. And, believe it or not, this counts out a large number of real estate agents.
The next thing is that I fire by them. Yes, I am known to have let a number of good producing agents go because they act in a way that is contradictory to our value system.
So, if a company doesn’t hire and/or fire by their ‘said’ core values do the core values really exist?
With this said, it probably comes as no surprise that one of The GoodLife Team’s core values is to produce a 5-Star Customer Experience (vetted by a public review) for every customer.
If I mean what I say with this core value, it ‘forces’ me to only hire competent real estate professionals who work according to a methodology and system that ensures delivery of a high standard of service. And, since I do mean what I say, I hire and train TO MY company standard since the GoodLife Brand is a consumer-centric brand. If an agent can’t hold the 5-star standard (that isn’t easy to consistently produce by the way), then they won’t work with me — I nicely suggest another competitor for them to work with.
As always, great post, Jeff! Great seeing you at NAR — and hope to chat again soon.
kw
You are one of the shining examples, in my mind, of the truth of what I’m saying. You can feel the energy when you walk into your office and the words you use to describe your process and the expectations of you have for performance, not only from your agents, but from yourself, resonate from every wall. Your comment above, ” I only hire to my core values. If an agent, no matter how much they produce, doesn’t match my core values, I don’t hire them. And, believe it or not, this counts out a large number of real estate agents,” is where I see most brokerages failing. They have no concept of what it means to “hire to my core values.” For me, this is the single greatest benefit of clear, actionable core values leading every decision a company makes. It starts at hiring, but it doesn’t end there.
Krisstina Wise and Jeff Turner, I want to thank you SO much for sharing your thoughts. You have no idea the impact your words have. I have visited The GoodLife Team’s office and was privileged to attend their office meeting the day I was there. It simply changed the way I see this business’ possibilities. I could no longer accept working with “leaders” (I use that term loosely with some folks…should just say that they had a title on their nametag) who only had core values on a wall and had to look at them in order to recite them.
I have worthy core values and proudly use them to serve my clients.
I had them prior to getting a license to sell real estate. I believe they are what attracts clients to choose me. I believe that I have to expose myself (core values mixed with top notch knowledge, skills and experience) to others in my market area. There is no website or lead generating service that can do that for me.
And I do not have to be Number One, have the largest market share, be the biggest bad ass realtor in the area. (Head counts, market share, big numbers are SO over rated!)
I simply have to be the best service provider with the clients I am currently working with, continue to grow with technology and keep up with our ever changing market and industry…do all the things that my core values tell me that I need to do…that I may deliver the best services possible to my clients.
When I do that…my clients are thrilled, I am happy, and more business comes to me as a result.
I am now growing weary of all this web chatter about the problems with Realtors/realtors, NAR, brokerages, FB issues, MLS issues, etc…
I read this post…saw Krisstina’s response…and just wanted to THANK YOU both…it does not seem like enough…but I do love the internet for exposing me to people like you in an instantaneous kind of way…I do not have to wait for your book…you share yourself and your thoughts here.
You are leading the way for people like me (if they are willing to pay attention and listen) to “rise up” and “grow up”. It has been a lot of fun. I do thank you.
Uh, when either of you do write a book, I will buy it, of course!
Happy Thanksgiving…I am thankful for you!
Michelle
🙂
Amen, Michelle! YOU are the rockstar of our industry!
Ya know I love you to death, Krisstina, so I’ll repeat my question here:
In the past 2 years, what has been GoodLife Team’s marketshare growth in the Austin area? Where do you rank today in Volume & Transactions, vs. a year ago, vs. two years ago?
When do you expect to be #1 in marketshare?
I believe in RTB, believe in more professionalism, etc. but want to see actual real world examples of where professionalism leads to competitive advantage reflected in (a) revenues, (b) profits, and (c) market share.
Rob,
Krisstina is one of the smartest people I’ve ever met, and she can and will answer for herself, I am sure. Having said that, here are my two cents in reply to your comments:
(1) Changing an industry like real estate is like turning a supertanker. It doesn’t happen overnight. Rome wasn’t built in a day, and neither will the inevitable paradigm shift from mediocrity to excellence happen quickly;
(2) Lots of people with very deep pockets have a very keen interest in keeping the status quo the status quo in real estate;
(3) It’s easy (or at least relatively easier) to scale any concept based on mediocrity when you have an industry full of mediocre performers. It’s much harder to scale a brand based on real excellence when the majority of people within the industry are not necessarily driven by a desire to excel. It takes time to attract top tier people, because they are few, far between and often geographically dispersed;
(4) I have spent the last 15 years studying real estate franchises and franchising. I have zero doubt that Krisstina is going to scale The GoodLife Team into something significant on a national stage whenever she makes up her mind to do that. Her concept is brilliant, and she has a level of talent on her management team that is an embarrassment of intellectual riches. Jack Miller, Kelly White and Garry Wise are individually among the sharpest and smartest people I’ve ever met;
(5) Consumers are largely uneducated on what separates the good agent from the bad. They think that the agents that sell the most are the de facto “best agents.” As one who’s been in the game 21 years, I can tell you that – with a few exceptions, of course – that is GENERALLY not the case. Agents *tend* to come in two flavors: those focused on personal income maximization for themselves, and those focused on serving clients to the best of their ability. Again, generally speaking and acknowledging the occasional exception, these two circles have relatively small areas of intersection, and
(6) I’m not sure I agree with your premise that being “#1 in market share” is indicative of being “the best,” which to me is the more noble goal. Does the best attorney in America lead in market share? Does the best surgeon perform the most surgeries? Perhaps they do (I actually don’t know), but my guess is that they don’t. Are those perfect analogies? No, they aren’t. But my point remains, which is that “being #1” and “gaining competitive advantage” are not necessarily the same things.
Sorry for hijacking the thread, but I couldn’t stop myself… Apologies to both you and Krisstina for sticking my nose where perhaps it did not belong…
Best,
Michael
Thanks for the hijack, Michael! I appreciate your words.
To your point, it takes time to make change. The GoodLife Team was conceived as an Independent Brokerage only 4 years ago — and I think we have accomplished quite a lot since our inception in a, relatively speaking, short period of time. And, I can say without any hesitation, had we simply adopted the traditional model instead of reinventing a consumer-centric brand with new standards and practices for real estate professionalism and performance, we wouldn’t be where we are today.
To think, in 4 years we are on the map during which time we’ve had our heads down innovating, building a brand new brokerage, building new tech, selling some houses, building more tech, hiring and training new agents to become professionals, building more new tech … producing recurrent 5-star customer reviews … on so on. I have taken on a lot, and have invested all chips in, with a fire in my belly to create a new way — a better way — of real estate for the consumer and for the agent. The fire burns strong, yet even so, I don’t think big change can happen over night.
Yes, we have far to go from where we are today — we are just getting started — and in the worst real estate economy during my 15 years in the business — but, we have big ambitions, to use your words, Michael, to “Raise the Bar”.
To answer Rob’s question: 4 years ago The GoodLife Team didn’t exist as a brokerage. I just checked, as of today, out of 1100 Austin brokerages, in terms of total closed volume via Broker Metrics, we sit at #46 overall and #19 of the Independent brokerages. But, what I think is a better statistic, is that all of my Agents (not including our recent hires, new to real estate in the last 6 months and in our mandatory 6 month training) will each close over 24 units this year!
And, we are profitable! It will be a good year:) Jack, Kelly and Garry and I will receive a nice dividend check at the end of the year — like I said, we’ve come a long way in just a few short years.
I also agree with you that the best way to monitor success isn’t necessarily market share! I say look to the Reviews. My goal is NOT to be the biggest, simply the best.
In our industry, egos ride on the ‘size’ of one’s brokerage — the more agents the bigger the Ego! Quite frankly, I don’t care how big a brokerage is, I want to ask the question: What is your Productivity per Agent and/or How Profitable are you? The words Profit and Productivity are missing from our industry. Why, because those two words are usually nothing to ‘brag’ about. I think, if most brokers were honest, the egos wouldn’t be so Big~
The GoodLife Team is about finding the right size, with the right group of professionals and staying there. In fact, because of our standards, we will be forced to stay small. Why? Because we are focused on quality and standards. And, what we know is that there are only a few licensees who are ambitious professionals who are willing to live up to high standards. And, we only want those. Why, because as a brokerage our brand promise is about taking care of the customer. We can’t keep that promise by hiring the masses. We leave that up to our competitors who love to tout their size because it’s the only thing that sounds impressive.
For us, small is not just a stepping stone; it’s our destination as a company.
Big Hugs to you Michael! So good seeing you at NAR, albeit too short.
Michael-
You are spot on with everything you said.
I certainly don’t think the best person at any job is the same as the person with the highest volume of sales at that same job. The best agents are the ones that give a sh*t about the client experience and are obsessive about making sure they do everything in their power to do the right thing for their client no matter what that means — and the people with the highest volume of sales aren’t generally those people. They are the people that will do anything and everything to close a sale…and do it over and over and over. The Krisstina’s, Kris Berg’s, Garron Sellikan’s, etc of the world are the people who are leading this industry down a new path… if you’ve met them in person, you know you instantly feel their energy, confidence, and values when in their presence. But that said, they are able to do what they do and enforce their values because they are small…it’s be a different ball game if each of them had 20,000 agent under them throughout the country — but I’m pretty sure that is not their end game goal.
Anyway, good discussion..
I see a parallel. The Brokerages who will hire any Realtor with a pulse …and Realtors who will work with any client. No discernment and focus squarely on accumulating numbers. I agree completely that there seems to be a systemic lack of leadership, vision AND values. I’m considering if its the ‘singular’ ego driven, competitive push to win that keeps the industry from achieving true professionalism and rich culture.
Love how you make me think Jeff 🙂
I disagree with the premise of the question, so I don’t really have much to say about the answer. The lack of professionalism in Real Estate is a cliche born of Sanka-stained sport coats and subagency, and bears little resemblance to the industry I work within currently. It takes a long time to change deeply ingrained perceptions of anything, but from my own myopic perspective, the continued calls for revolution obscure the fact that the industry IS changing along with those in it. Perhaps my market is an anomaly, but I have far more encounters with savvy, professional agents than I do with the knuckle-dragging types we love to loathe.
Change takes time, and lingering perceptions even longer. That’s not to say neither is under way, but that it can be imperceptible in real time.
If there is a credibility problem within the industry that needs solving, it derives from our own insecurities. Calls for wholesale shakeup are much easier than focusing on one’s own practices as it insinuates someone else is the problem.
You can disagree with the premise of the question all you want, but survey after survey shows that real estate agents are seen in a very, very poor light by consumers. And I’m not calling for wholesale shakeup. I’m not calling for a revolution. I don’t think it’s required. I’m saying brokers simply need to lead with a clear vision and actionable values and grow a backbone. There are GREAT agents out there who don’t need leadership, and there are good agents wanting to be great who are looking for leaders to help them.
Most Real Estate brokerage companys are a refletion of those leading it and to what goal they are set. As with large corporate own brokerages you might see share holder return on equity as the primary goal. This leads to the belief the bigger is better. Only when service to others is the primary gosl of a brokerage do you really see the professionalism that should be hallmark of our industry.
Well said, Mike.
Jeff – well said. Keller Williams likes to tout their values WI4C2TS – and I think that is great, there is something there as a benchmark. I’m sure other brokerages have their own vision, mission and value statements. Some use the Bible or other religious texts for value guidance.
The issue as I see it isn’t so much the vision, or the set of values it’s the rubber meeting the road. Too many of us struggle with walking the talk, emodying the message or values. Especially when our actions come face-to-face with survival issues – I really need this deal.
I love Integrity: The Courage to Meet the Demands of Reality: How Six Essential Qualities Determine Your Success in Business by Dr. Henry Cloud.
I like to assume that most of us sincerely struggle with doing the right thing. Good, if not great, leadership would be wonderful support. I don’t really see much of that on TV or YouTube or Facebook. Where I seem to find it the most is in the quiet places – people living their values in a quiet way that isn’t meant to draw attention, but serves to deepen their character, support connection and equality, and extend & express value to one and all.
In short, I think good leaders with deep character and openness who also have a capacity for synthesis/integration would be refreshing in real estate and the world.
No intention to lead to swollen head, but my observation over the past 5 years is that you are of this ilk – would you consider running in 2012?
I don’t dispute consumer opinion of the industry in the least, only the immediate leap to the stewardship and professionalism of those at work in the market today. It will take years for perceptions to change for anyone perceived as a necessary societal evil (politicians, salesmen of all variety, etc), but that doesn’t equate to an immediate lack of professionalism in the current brokerage/agent landscape. As in all things, we are burdened by baggage that the current incarnation of the industry did not necessarily pack. Whether professionalism exists in spades or in slivers, the reputation of the industry is such that it is from past missteps that it will take years for public perception to accept any new reality.
Subagency is dying, dual agency won’t be around too much longer IMO, privately held data has largely been freed to the public domain … we’ve taken some big steps in the past couple of decades. I’m proud of what the industry has accomplished, and of what lies ahead. I maintain that there has never been a greater degree of professionalism (however that is quantified – another reason it is an easy criticism to make) in Real Estate than there is today.
Perception will eventually catch up to our changing reality, but I see us on the right course when I step back and take the broad view of the past fifteen years.
No criticism of your points were intended, Jeff. More directed at the common sentiment that spawned the initial question.
I hear you, Paul, and I appreciate your comments greatly. And I agree with them, in general. I just feel the changing reality needs a focus, not a revolution, not a shakeup, but a push in a direction that allows for sustainable progress. It will, indeed, take years to right the public perception.
You make NAR sound a lot like the OWS movement. Why do I picture Jay in a subcommittee meeting employing the human microphone to debate IDX policy revisions. 😉
I feel a parody coming on …
LMBO
First of all, I fully agree with the premise about brokerages lacking a set of core values to run their companies. My partner and I have been selling residential real estate for more than 30 years. In those 30 plus years we have only met a handful of dedicated professional agents.
The ugly truth as we see it is the ‘unprofessional-small-retailer-mindset’ of most broker offices. I am not referring to those few companies that provide ongoing training and whose primary goal is to be the best service provider in their market.
Sadly, the majority of brokerages operate as nothing more than warehouses for real estate licensees. These brokerages discovered that training salespeople requires hard work and it is easier to simply get more bodies into their offices.
So long as the majority of brokerages operate under such a poor and lacking mentality, I see no improvements for the real estate industry in the horizon.
Great post, Jeff. Thank you (and everyone else) for sharing your thoughts and opinions.
I think every industry experiences similar challenges when that particular vertical changes so rapidly. IMHO, there are several things that continue to contribute to the slow deterioration of the REALTOR® brand, but, in a word, I think it’s: Information.
When our customers feel like they’re more informed than most agents, it poses a huge problem. Clients turn to the Internet (and get listings, comps, legal information, contracts, etc…), cable television (shows that “educate” about real estate, staging, house hunting, etc…), and Mr. Lister/FSBO companies. They think – why should I hire an agent?
Look at how websites like eTrade, Scottrade and Fidelity have changed the landscape of investing in the stock market. Not to mention entire cable channels like CNBC. 20 years ago, no one traded stocks on their own – they needed a financial advisor. Are there companies out there that fell by the wayside because they couldn’t adapt – yes. Are there companies out there that embraced the change, re-educated their employees and adapted – yes.
I see many similarities to our industry.
I think, to the point of your post, vision and value boils down to each individual person – period. I didn’t say agent… I said person. A person’s vision and value system, in most cases, has nothing to do with their profession. It’s something that’s been instilled in them by . If that person has the right stuff, they thrive in any business (and in life).
Can organizations (brokers) hire the right people – yes. I think there’s a universal hatred (maybe that’s a strong word) of the customer service we receive from cable companies. But, books are written about companies like Zappos.com. That says to me that it’s possible to hire the right people, but it takes time, effort, vision, and the guts to remove ‘dead weight’ – I love Krisstina’s post about this exact concept. Her organization is top-notch!
When it’s tougher (in Maryland) to become a cosmetologist than real estate licensee, something is broken – we’ve set the barrier-to-entry too low which only exacerbates the problem. We, as a profession, need to separate ourselves from the crowd. Adapt or die. And, we can’t wait for the NAR or our brokers, either…
real estate agents are sales people.
And…
Is that what’s known as a ‘truncated’ thought?
There’s nonstop hand-wringing on the REnet about low standards, low professionalism, etc, etc. Yeah, we should be better – what industry can’t say that? But at the end of the day, one has to be good at sales to be successful in this business. The reality is that everything else – vision, transparency, etc – are all a distant second. So what Teresa said (I think) using over 10 times more words.
I’m just tired of people blaming the model. It’s not the model’s fault.
John Carr – What a sad state of affairs that you have only encountered a handful of professional agents in thirty years of selling. If we are truly defined by those we associate with, I commend your ability to rise above such a bastion of incompetence.
Paul Slaybaugh – I don’t know that is truly that sad. Both my partner and I are dedicated professionals and we have spent thousands of dollars and hours on personal growth and industry related training. What we have both found is that the level of mediocrity we see in our industry is also prevalent in many other industries.
I am not about to begin making a long list of such professions, but lawyers, mortgage brokers, many medical practitioners to name a few, appear to stop learning the moment they leave school.
We are not the top agents in our city. We simply strive to provide THE most professional service to all of our clients.
Is there another industry that uses the same “indy” model that actually works well enough for the public to view them as professionals?
Good question.
Looking at the Gallup Poll, it seems the professions/people who enjoy trust are all involved in saving lives and souls. I don’t think it’s likely that professionals who focus on other aspects are likely to rise into that category.
http://www.pollingreport.com/values.htm
Imo, leadership, values and vision are in short supply in every industry. When it’s present, better things happen. To the degree that it’s absent, crap happens.
My 2cents.
I have found that many people and organizations mistake slogans and programs for core values. An example: Last night I went to the preview of the L.A. Auto Show. All the brands were represented with elaborate displays and floor reps showing off their company’s new models. I stopped at the Audi display and saw some great cars with beautiful styling, boasting of great performance, incredible driving and handling. A knowledgeable Audi rep and I got into a discussion. He asked me what I drove. I told him a Lexus. He asked why? I told him that it wasn’t just the car, it was the incredible service experience that was part of my driving and ownership experience. I gave him an example of how I was treated at my Lexus dealer every time I went in for service. He dropped his head, avoided my eyes and said,”Yeah, we’re trying to do that but we’re not there yet.” I told him that the kind of service Lexus delivered had to do with their values. He said, “yeah, we’re trying to instill those values in our dealers but we haven’t been able to do it – yet. But we’ve got some new service program initiatives, and most of our dealers have signed on and have agreed to provide that level of service.” I asked what the consequences were if a dealer didn’t perform. He said, “Well, if a dealer doesn’t perform, then he’s denied some of the price goodies and some of the inventory choices that we offer.” I asked him how that was working? He said, “OK but not great.”
I told him that at Lexus, if a dealer didn’t perform the way they committed to perform — THEY WOULD LOSE THEIR DEALERSHIP. I was told by a Lexus dealer that it was written in their franchise agreement. I went on to tell him that I saw that as the difference between living a core value and operating with a promotional program. He looked at me for a long time and finally said, “Yeah, I guess our management just hasn’t gotten there yet.”
I thanked him for his candor and told him I wouldn’t be switching car brands any time soon.
A lot of management doesn’t get it yet, Bill. 🙂
(for those of you who might read this, Bill has been my mentor for the better part of 20 years)
I have read so much about failed leadership in real estate. So much concern of what will become of us as an industry. Concerns about what will happen with the data. All valid issues. The people are hungry for a vision to follow. You can read in it 100’s and 100’s of articles. We have weathered a long storm. However there are now important discussions about the HUMAN SIDE of the the transaction. Like a quiet storm that few pay attention to, this is what will lead to our revitalization of our industry. It is the most powerful thing that has come to real estate in decades. Imagine raising the bar 10x higher than it is right now. Is that out of reach? Why can’t our industry be thought of as one of the best careers to pursue or most trusted? It can. Stop the complaining and start the designing. The HUMAN SIDE of the transaction has often been ignored. Just go to a convention and see what is being sold. Just look at the company training program to see what is offered. Is it built around an understanding of the pain/denial a client/seller is in and how to serve and communicate with them? It is time for exceptional training in customer care. We cannot have revitalization of the industry without improvement in service. Selling less than 50% of listings is appalling. What is your firm at? I have seen major franchises sell only 30% of the inventory. A lot of unfulfilled promises. It would be an embarrassment to an agent if this was discussed at the listing interview. “Yeah..we do all that marketing…all this technology, and have this great brand name, but….with us you have about 4 in 10 chance of selling.” Imagine telling a new agent “yep you got about 4-5 chance in 10 of selling any listing you take.” All the technology and the great brand name, yet little chance of selling. Where is the truth in that? But it will take an investment…a commitment…a shift. Some will not get this for years. In speaking with leaders in some companies I can hear it…..soon…..the shift…..to the Human Side. The benefit will be selling more of units under current control (frozen assets)…so less time will be needed to pursue and replace the lost relationships. This will be the new competitive edge!
Krisstina and Michael –
No doubt you guys are kickass, no doubt that your companies are among the most admirable in the industry. But I was trying to address Jeff’s point about vision, leadership, and so on.
I think professionalism in real estate isn’t widely embraced not because of a lack of vision, lack of values, or lack of leadership, but because it doesn’t pay except in emotional ways: feeling satisfied, feeling great about the service you’re providing, etc. It’s the difference between being Falcon Northwest vs. Dell.
Fact is, if your goal is to remain a small boutique with high profitability, that’s a wonderful goal. But it won’t have a major impact on the industry as a whole. Because none of you, none of us, none of “them” are in this for self-satisfaction. We’re all in it for the money, for business.
Show the industry that having high professional standards, enforcing them, and having vision and core values that mean something leads to competitive advantage that takes business away from those who do not, and you’ll change the industry.
Like Bill Leider’s example above, when consumers demand you over others, and showing you their preference not just with words but with dollars, then we’ll see wholesale change.
The issue is, as Michael pointed out, lots of people with deep pockets have a keen interest in keeping the status quo. There are structural defects within the industry that prevents professionalism from becoming a real competitive advantage. You can’t blame the “leaders” for not enforcing things that lose them money.
So my fondest hope is that GoodLife Team becomes #1 in Austin in the near future, taking business away from everyone who isn’t practicing your high standards for professionalism, thereby showing that not only does professionalism pay, but that not having it will hurt you in the marketplace.
In business, that’s the only argument that works: money talks, and very, very loudly. Preach the message, of course, but show them the true path by crushing them in competition. Suddenly, we’ll find all sorts of leadership with all sorts of visions and values springing up all over the place.
Great article and great comment thread. From a brokerage standpoint, I totally agree that clear values, a mission, and clear cut goals are essential. Leadership is needed. But I got to thinking about the agent side of this conversation.
I see agents in our market treated more like professional athletes. With no brokerage taking the reigns as an “idea leader” with clear vision, they are pretty much bouncing between big box brokerages searching out the best split for their deals. This touches on Rob’s concern with the bottom line: why would Agent X go with Small Brokerage Y is she can make more money for her deals in Big Box Brokerage Z?
The image of our industry’s top-producing agents is what we are being judged on. I think the pyramid (“team building”) style brokerage model really hurts in that respect. Meaning if I’m a top-producing agent handing out leads and taking a cut, I don’t really care if the agents share my ideals or want to “raise the bar.” In fact, I just want as many agents under me as possible to increase my bottom line.
“…everyone wants to be associated with a strong vision.” I have to assume that this is maybe where Michael and Krisstina have succeeded where others have failed. I’ve witnessed enough broker/agent interviews to know that the decision has boiled down to where the agent can make the most money. Is a brokerage’s mission and set of values enough to recruit quality agents?