The state of our industry and what you can do about it
Several years ago, I was having dinner with a senior executive of a large real estate organization who made an interesting statement that explains why we continue to see brokerages resisting change. He stated that agents are afraid of consumers, managers are afraid of agents, and owners are afraid of managers. As a result of this ugly chain of events, agents “cave” on commissions, managers “cave” on splits, and owners don’t hold their managers sufficiently accountable. Sound familiar?
Many readers of this column have asked me to address how to implement change in their companies and highlight brokers around the country that are successfully breaking the mold.
It all starts with ACCOUNTABILITY!
The reason everyone is scared is because nobody is holding anyone accountable. Sure, we can say agents are independent contractors. Sure, we can buy managers telling us agents will leave if we don’t give them a higher split. Sure, we can let the inmates run the asylum but is that really running a business?
Part of the problem is that real estate is a people business with lots of egos and emotions involved. However, if you build a culture of accountability people will expect more from each other and will not want to let their teammates down. Gino Blefari, President of Intero Real Estate Services in Silicon Valley, believes that culture and accountability are central to the success they have experienced since 2002. Without a single acquisition, Intero captured #1 market share in Silicon Valley by 2009.
When asked about accountability Gino said he is a big fan of Charles A. Coonradt who wrote the books “Scorekeeping for Success” and “The Game of Work”. He gives Coonradt credit for this quote which sums up his philosophy, “When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates.”
Another successful company that has broken the chain of events I mention above is @properties in Chicago, IL. Mike Golden, President of @properties has this to say about why his company has also vaulted to #1 market share in Chicago in less than eight years, “In order to be effective with change you have to have the infrastructure to support change otherwise you’re just floundering about… there are few things more frustrating to agents. So while we’ve always been focused on innovation, we’ve also been very disciplined about creating and maintaining the infrastructure that allows us to roll out new initiatives in a way that feels very natural.”
If brokerages can create a culture of accountability and innovation they can be successful in spite of a still difficult market. Those who are still scared don’t have a very bright future. Those who have faced their fears, hold their people accountable, and continue to innovate will have all the opportunities they can handle.
