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Driving Management Collaboration

March 04 2015

changeAs the industry continues though its winter and spring conference season a number of evolving concepts have become increasingly clear. For those who have been tracking industry acceptance of change and adaptation, it would appear that a point of universal acceptance has finally been reached relative to the fact that the traditional brokerage business model is neither functional in today's real estate industry and market environment nor appropriate in terms of profitability and return on investment.

With very few exceptions the coaching, presentations, articles, blog posts and editorials delivering this enlightenment have carried the message that, moving forward, brokerage management will have to be a matter of neutralizing agent centricity, focusing on customer experiences and installing metrics driven management practices that are surrounded by and driven through standards, best practices, accountability and organizational transparency.

Of course, it will come as no surprise that those industry executives who are less than excited about this impending transitional experience (and the prospect of spending the last years of their careers engaged in a total reengineering of their life's work) are reporting to company decision makers that move in these directions will cause massive disruption within the agent panel. What is of even greater concern is that these announcements are, in many cases, not issued to assist top brokerage executives to anticipate danger ahead as much as to ward off the decision itself and allow these veteran and vested managers to skate to retirement. All of which is to say that there is growing evidence that it is senior managers that may be the ultimate impediment to brokerage change rather than the more traditional scapegoat, the agent.

A part of this evidence can be found in the migrations that agents themselves have made over the past few years. Tens of thousands of agents have become affiliated with, and subject to, advanced (however subtle) management relationships with portals and third parties like Zillow. Consider the overall reality of the massive agent team movement. Finally think about the impact of the industry's growing coaching movement like the MAP program offered by industry giant Keller Williams. All of these programs demonstrate that many agents, especially those that want to be among the now famous 15% that do 90% of the deals, are looking to create a new working environment. It has become increasingly clear that at the core of this new environment is a rejection of much of the traditional agent "I don't need no stinking boss" attitude and an acceptance of the fact that the best option for today's successful agent is a more synergistic and structured relationship. If this is the case, it certainly opens the door for a much more productive and collaborative working relationships between the contemporary agent and the progressive brokerage.

But the subject of this comment is not the agent's transitioning attitude position, but rather the fact that the most significant challenge to the brokerage's attempts to transition to the new relationship may come from the management team itself and not the agent panel.

Many long-time brokers will respond to this possibility with heartfelt annoyance and even anger declaring that such is nonsense."Why, John and Judy have been with me for 25 years. I trust them implicitly. We have been through so much together." While it is certainly possible that this declaration of assumed loyalty is possible, the situation nevertheless requires a closer review and measurement before the brokerage undertakes a significant transition of management style and operational format under the assumption that long time management staff will be the cornerstone of the leadership required to take the journey.

No small part of this issue can be a realization that while brokers who realize on 30 years of hard work are on their way to tropical climes, those who feel they were responsible for that success must now face an uncertain future in the company of a Wall Street driven minion.

The recent experiences of clients within the industry and studies conducted outside the industry suggests that while long years of management service does create a certain loyalty, it also frequently results in the creation of management spheres of influence or, as they are better known, "empires." Efforts to effect substantial change with respect to these spheres can unleash responses and counter campaigns that are both dangerous to firm stability and lethal to efforts to move the firm in new directions.

Firms engaged in management and operational transitions might give some thought to incorporating the following points into their process.

  • Recognize that while traditional business models generally emphasized individual performance many of the new business strategies place a high priority upon team environments and tactics. Individuals who have spent their careers being rewarded for managing individual performance are going to require training and motivation to become team managers and players.

  • While many traditional models promoted and encouraged general practice as the key element, moving forward firm's will discover the necessity of specialization. They will soon seek to drive client collaboration by creating multi-specialty teams that can address the increasingly complex and sophisticated demands of real estate clients, customers and consumers. Most importantly, the revenues generated from specialty service teams is always higher than that generated by the generalists. Obviously managing this manner of group and process will be a significantly different experience. It will be a challenging but necessary objective.

  • The company's commitment to any new programs must be readily and completely apparent from the beginning. While the value proposition of being positive is always important, it must be equally clear that there will be consequences in the event of failure.

  • The commitment of top company management must also be clear from the beginning. This cannot be a "cause of the day" situation. Managers who have worked for the company for years will be watching to see if this is just another "flash in the pan." They will delay their attitudinal implementation in anticipation of top management failing to follow through.

  • Moving forward collaboration will become a key dynamic on the brokerage landscape. Collaboration doesn't just happen it is a learned behavior.

  • Brokerage management programs must integrate management and transactional technologies that can monitor, track and respond quickly to energies and directions that run counter to the new company direction. These systems must create near real time reports that can be used to direct the team's activities. These reports will be the foundation of the company's new transparency.

  • Management compensation must be tied to collaboration and team production.

  • The new programs must be instituted evenly across the board. Demonstrating favoritism by allowing more "sainted" managers or departments to work outside the new program will quickly bring the whole program to a halt.

  • There must be immediate and meaningful consequences for non-compliance. Counseling, corporal measures and ultimate consequences must all be clear and concise from the start.

  • The company must "stay the course." Failure to follow through and demonstrate cohesiveness' and commitment will create havoc on efforts to join subsequent movements for years to come. Such a mistake will also negatively impact the company's external reputation moving forward

It is obvious that the majority of firms, regardless of size and scope, will be either moving to capture or avoid being captured by the amazing opportunities being generated by the current industry environment. Not everyone engaged by the industry at the present time will be excited about these opportunities and indeed there is no duty to be so. However there is a moral, ethical and, in some cases, a legal duty to either join the movement or remove oneself from the game. As is always the case, it will be the broker's responsibility to ensure that the team moving forward has done everything possible to ensure victory and success.

To view the original article, visit the RECON Intelligence Services blogRECON Intelligence Services blog.