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Focus On High-Gain Activities

Sep 3, 2010

Posted by

Michael Staver

Michael Staver, CEO of The Staver Group, is an internationally respected coach and speaker. He has coached many of the leaders of the Real Trends Top 50 real estate brokers and is often a sought after Read more

Over the past decade, the real estate industry has transformed itself so completely that real estate brokers who continue to do all the same things care at significant risk. Here are five reasons for focusing on high-gain activities, and five suggestions for getting started.

Real estate professionals today find themselves on a whole new playing field. The 2010 industry bares little resemblance to, say, its 2000 incarnation. Of course, we all know things have changed.

But despite that knowledge, many are clinging stubbornly to the old rules of the game and this is a significant mistake. If you let yourself get bogged down in urgent activity that is not that important instead of performing what I call high-gain activities -- you’re living on borrowed time.

This industry has transformed itself so completely that professionals who aren’t doing different things are at significant risk. Years and years and years ago, real estate was a cottage industry; everything was locally and/or family owned. Since then a trillion dollars has flowed through the industry and everything has changed. Of course professionals have to change, too!

Today’s broker/owner needs to function not as a real estate operator but as a CEO of a multimillion-dollar corporation. Yet, I have one client who took 60 days to settle on the right colors and lettering for his standardized signage! What that says to me is that many real estate professionals are having trouble coming to terms with their new reality.

Five Major Factors

The unpleasant truth is that in times of massive change, those who can’t keep up are likely to get swept away. Here are the five major factors that are having a significant impact on the way organizations are run.

1.) Downward Pressure On Sales Commissions.

The culprit? Mainly alternate business models and a more intolerant consumer. Quite simply, consumers are no longer willing to pay agent commissions—at least not on the same level that they once were. Companies and their agents must clearly understand and articulate their specific value as it relates to the customer. It is the customer’s perspective that matters—not yours. The resulting pressure from consumers has brought to the table a need to evaluate how we price a listing and then how we provide for the customer a clear understanding of the costs involved in marketing their house.

2.) A Consumer-Centric Marketplace.

Once upon a time, real estate was a provider-driven market. Customers listened to their agent and signed on the dotted line. Today, customers control the transaction. This sea change can be attributed to the technologically-driven flow of information and sense of consumer empowerment that spans many different arenas. Providers no longer have a monopoly on information. And though many real estate professionals tend to cling to the belief that they’re in charge, it’s a delusion. The job has almost nothing to do with selling a house fast; it has everything to do with understanding the hearts and minds of the consumer.

Real estate companies should operate like restaurants. When you dine out, does the waiter bring the food out ahead of time and try to sell you on it? No! He tells you the specials, asks a few questions, takes your order, and works with the kitchen to match a meal to your desires. Likewise, real estate brokers should train their agents to find out what customers want and need. The company that sits in an office far from the consumers voice and attempts to create programs that they intend to “drive out” to the customer is a dinosaur and we know what happened to them.

3.) Emergence Of Alternate Business Models.

 Your competitors are no longer limited to other real estate companies like you. Completely new horse-of-a-different-color businesses are springing up to give consumers the information and experience they want and need. And the information-saturated marketplace has forced brokers to reevaluate their strategies. After all, any Mom and Pop company can get on MLS, get every listing, and post it on their website. Consumers think, “Well, if you won’t tell me what I want to know, and provide a buying or selling experience the way I want it, perhaps the brokerage across the street will.” It’s just a different world now. Do not, shun other models! It is foolish and dangerous to think that your model is the ONLY model that works. The courageous leader is willing and insistent on looking at other models to see what can be incorporated.

4.) An Underdeveloped Leadership Talent Pool.

The robust real estate market, combined with the tidal wave of change that has swept over our industry in the past decade, has created a whole generation of managers out of former agents. And, of course, the harsh truth is that no matter how brilliant and successful an agent might be as an agent, she is not automatically a great manager. Real estate brokers are finally realizing that leadership skills don’t magically happen. Development firms like mine are working with brokers to increase leadership competency and bring on board emerging leaders. The industry is in a massive learning curve as people work to learn vital new skills.

5.) Our Current Market Correction.

 Let’s face it: for years the real estate industry was wallowing in champagne and caviar. A robust market hid a multitude of sins. And now that our economic power surge has ended—the low tide has exposed some disappointing realities. It is critical that we rethink what a top performer is. Is it really the brokerage with the most agents that wins? I suggest that the firm with the highest performers wins. It is certainly time to consider that a better model is quality over quantity. And fundamentally, we need to sharpen and intensify our focus on high-gain activities.

The Bottom Line

Real estate professionals must break out of their comfort zones and start devoting their time and brain-power to high-gain activities: articulating vision and values, creating a framework for exceptional client experiences, increasing the value of assets under their control, creating a high-performance culture, and finding and developing world-class talent.

It’s not always easy to get focused on high-gain activities. We naturally drift toward what we know, and sometimes we don’t want to admit we need outside help. And though you may have the best of intentions, “wanting” to change isn’t synonymous with “willing” to change. Here’s how you can get started:

Articulate Your Vision And Values.

What does your company stand for? At the end of the day, what matters most? Integrity? Excellent service? Making lots and lots of money at all costs? Every company stands for something and leaders must make their values and vision absolutely clear to their followers. After all, people do not function without a purpose. If you are not keeping your company’s vision and values in front of them at all times, they can’t know what to align their behaviors with.

Create A Framework For An Exceptional Client Experience.

Most organizations are structured to serve themselves, not the customer. But to be truly successful in the Information Age, you must design an experience focused on the consumer experience as articulated by the consumer. You must structure your company around what the consumer really wants, not what you want her to want.

Increase The Value Of Assets Under Your Control.

If you automatically think “hard” assets like business equipment, or those capital draining  buildings you own or lease you’re on the wrong wavelength. Your most valuable assets are your human assets —despite what your accounting department may believe. (Did you know that on most balance sheets a desk appears as an asset and a person appears as a liability?) How do you increase the value of your human assets? Commit to developing them on a personal and professional level. Help them maximize their strengths to the benefit of your company. Cut low performers off. Stop believing and acting like the most  agents win.

Create A High-Performance Culture.

This high-gain activity can be summed up in three simple steps: 1) Articulate your expectations to your people (this goes back to our first tip) . . . 2) Make sure there’s a system in place to give people what they need to achieve those expectations . . . and 3) Be certain you’re holding them accountable for achieving expectations. It’s that simple.

Find And Develop World-Class Talent.

It’s easy enough to focus on talent when you have a job opening and need someone pronto. Problem is, by then it’s too late. Constantly be looking for and wooing talented people! Redefine your definition of talent. Demand that those that join you and stay with you are the best performers out there. It is much less expensive in the long run to spend resources on your A players than to spend endless hours attempting to build C players.

Implement these steps and you will create a model for achievement that will be essential to your agents’ success. It will help you brand your company as the best out there. High-performing agents will want to be a part of your team and when you have the best team the results are easier to come by.

 Know that when you and your agents have committed to doing the hard   work, the rewards will come. Your clients will spread the word about the world-class customer experience created by your agents, the best of the best. Being successful will become second nature to your team; they won’t know any other way.