An Industry of Exceptional Success

If it’s true that exceptions aren’t the norm, why is the real estate industry built around them? In almost any other endeavor, exceptions are considered undesirable: unintended effects, accidents, unexplained occurrences. Not part of the plan, and generally bad. Exceptions are usually damaging – to the business plan, the mission, the consumer experience. To the bottom line. Since the industrial revolution, most businesses have benefited not from lucky exceptions, but from planned consistency. Management itself focuses on creating consistency of outcomes to maximize resources. Profits come from maintaining predictable, repeatable, desirable outcomes. Consumers pay for an expected outcome, not a surprise ending.

No wonder, then, that real estate professionals struggle for profits, when their management strategies focus on outcomes as exceptions, rather than rule.

Real estate is an industry full of exceptions. Consistency is broadly elusive, a hobgoblin that is frowned upon as “uncreative” or impossible. Even branches of the same company deliver entirely different experiences and outcomes, often for the very same customer. The pervasive lack of written business plans are further testament to fundamental avoidance to performing according to a plan.

The most basic activities in the business are rife with exceptions rather than norms. Some examples:

• Listings with videos online are the exception. complete listing data is just as rare.
• It’s exceptional to find agents with smartphones; even more unlikely to find them updating their Facebook page from them.
• It’s unusual for brokers to have a written set of standards of performance, expectations for agent’s quarterly performance; even less likely for brokers to use such standards to recruit or fire agents.
• It’s unlikely to see agents nurturing internet leads after a first or second attempt; a near certainty that most will never nurture them beyond a month.
• Exceptional are the agents who pay for training and coaching; rarer still to see a full classroom, even when the class is free.

We could go on. More likely, so could you.

Worse, consumers could add to the list of exceptions as well. It’s exceptional for a consumer to get clear answers about a listing when they call an office; even rarer to receive a follow up email if they weren’t ready to set an immediate appointment. Consumers consider it exceptional to find the agent, not an assistant, standing in the open house; they find it less likely that listing agent will walk through with them explaining the benefits and features. Sellers think it unusual to find an agent who can explain market absorption rates; they are resigned to the extreme unlikelihood their agent will be present when someone else is showing buyers the home.

When consumers begin to think their desired outcomes are the exceptions of service, not the norm, it can be no surprise to find them going elsewhere for help.

No industry can expect to survive the recession with this kind of “mediocrity methodology” for success. Even during the boom times the performance consistency wasn’t much better; perhaps worse, as agents were too busy with multiple offers to care about multiple photos online, and brokers papered over bottom-line losses with top-line dollars.

Eventually, when the free dollars run out, as the tax credits and FHA-funny-money surely will, the brokerage business is going to be right back at broke.

None of this has to happen, of course. There isn’t a single success exception that is so wild, so amazing, so unique that it can’t be captured, systematized and maximized. Ten percent of the industry already does this. They have divided the work, systematized the procedures and computerized the techniques. They make a profit – which the rest thinks is unusual or lucky or magical – because they turn the exceptional into the ordinary.

Consistently successful real estate brokers must learn to do what consistently successful any-other-industry-companies do. Such as:

• Build a business plan. Work the business plan. Stick to the business plan.
• Define the goals. Delegate the outcomes. Hold people accountable for their contributions.
• Ask the customer. Listen to the customer. Give the customer what they want.
• Get the tools. Learn to use them. Then apply them every day, according to schedule.
• Identify the work the customer wants done. Do it. Fire anyone who doesn’t want to.

Think of every time you have been pleasantly surprised by a product or service organization; did they do it by accident or by intention? The iPod wasn’t lucky shot: it was a planned achievement. The Ritz-Carlton delights guests on purpose, by management intention and employee effort, every time.  Top agents don’t simply “get there” because they are pretty or personable or in the right place at the right time. They write down their goals, They are commited to achieving them and they do what needs to be done to get from here to there.

Ever top company in every industry makes success a normal standard of operation. Their achievements are never extraordinary.

Peter Drucker used to ask what the “sound” of a highly performing company was. The answer, of course, was silence. Best-in-class companies aren’t running around in a panic, in chaos, flailing about or putting out fires. Their performance is planned and everyone’s contribution is regular. They are successful precisely because they create performance environments where doing the right things and getting things done isn’t a surprise. It’s the standard.

Today’s real estate industry is noisy. If it’s not moaning about the market or wailing about the consumer, it’s crying about credit or shrieking from technology. Most companies aren’t much quieter. The exception is to find agents prospecting; the norm is to find them complaining. Only exceptional managers are coaching agents or monitoring leads; the usual suspects are doing paperwork. At too many levels, the success activities are rare, inconsistent, sporadic. Making the sales numbers for the month is surprising rather than expected.

It’s not too hard to see the logical conclusion to this strategy. When companies leave it up to what people “want” to do rather than what they “need” to do to reach their goals, the results are wholly dependent upon whim. Success itself becomes rare, for agent’s trying to make careers and brokers trying to build companies. Regardless of the market. So while it’s not necessary to hit the bulls-eye with every shot, it is necessary for everyone aim at the target on purpose, not exception, every day.

- M