Are You Harvesting Your Own Digital Disrupters?

So, what happened? Both of these folks approached the principals of their respective firms and indicated their concerns and observations that the firm was not keeping pace with current developments in their industry. Both called attention to the fact that the attorneys and agents over which they had supervisory responsibility were not confident in the firm's ability to meet ongoing challenges. Both were told that such matters were not within their area of responsibility. Both have now moved to firms that are tackling the challenges of digital disruption head on and both of their former firms have lost individuals who would have been key to their future success.

How does this happen? One would suspect that arrogance and fear played a role. But beyond such simplistic observations, how is it that so many brokerages across the country are meeting the digital disruption challenge by sticking their heads in the sand and engaging in denial?

Digital disruption isn't a black swan that sneaks up on an industry overnight. Rather it is a magnetic force whose origins can almost always be traced back a number of years. It attaches itself to unnecessary friction between consumers and businesses caused by redundancy, broken trust, limited access, waste and unnecessary complexity.

The solution to digital disruption isn't panic or denial. The fact is that your digitally empowered competitors are depending upon such responses in their efforts to overtake your market position. The solution to digital disruption is digital transformation. Digital transformation is the process through which the brokerage first undertakes to understand how digital disruption impacts the brokerages consumer experience and next moves to cover the disruption with a countervailing force.

Digital transformation is a result of brokerages working to adapt to the assault of disruptive technologies that affect agent and consumer behavior. As disruptive technologies become a permanent fixture in the real estate transaction, brokerages must update their legacy technology strategies and service packages to mirror how the marketplace is evolving. The need to do so is no longer optional. The following brokerage best practices represent the foundation of this process.

• The brokerage must instigate efforts to understand how today's consumer has changed over the past few years. The brokerage must understand and appreciate not only how the events of 2005 through 2010 impacted the industry itself but, of equal importance, how this same period impacted consumers, especially those in the younger generations.
• A second step is for the brokerage to gain a proficient understanding relative to the difference between the traditional real estate consumer and today's digital empowered consumer. It isn't just a matter of technical skills; rather it is an entirely new attitude and mindset brought on the power of information.
• The next step might be to better understand just how different the digital consumer experience is from the traditional one. Digital disruption is not about fusion. It is not like a local eatery suddenly mixing Asian food with southern cooking and giving it a catchy name. Digital disruption is more often about convergence. Two trends or forces collide to create something that is essentially new. In most cases, any similarities between the new and the old exist only in the traditionalist's mind. Digital disruption creates new dynamics, new operating methodologies and new emotional and psychological reactions.
• Continuing on, it is critical for the brokerage, its staff and agents to work in a collaborative fashion to map out a plan for digital transformation. The transformation of the brokerage will require whole new areas of knowledge and competency. Digital strategists and digitally native brokerage executives are carving out new areas of power, influence and sustainable profitability. These are not new tricks for old dogs, but rather new tricks for new dogs. Traditional entities must respond by recruiting these new dogs and giving them the space and power to do their magic without a constant referral back to the "way we have always done it."
• Finally, the traditional brokerage must recognize that much of its solution lies within its own organization. Many real estate brokerages have within their existing ranks individuals who either have the answers or are developing the answers right under the broker's nose. The traditional caste and maître-d system is no longer effective, certainly not in the face of digital disruption. It is remarkable how few brokers and brokerage executives are looking internally for solutions.

This last issue returns the story to its point of beginning. What happened to the attorney and executive whose adventures inspired this article? The attorney is with a new firm that, as a condition of his employment, has created a strategic management committee that includes young lawyers. The highly productive, spectacularly talented, former agent has been named CEO of a new 450-agent office that is working hard to create the perfect consumer experience.

We can do this, we have to do this!

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