Yesterday found me on the 15th floor of the New York Times building in Manhattan, part of a trio of industry thinkers including Mike Staver and Steve Harney. Joining us for three hours of “ask anything” discussion were some of the city’s finest brokers and managers. The host, Leading Real Estate Companies of the World, had brought us together for a second time (the first in Phoenix) in a brainstorming session that had audience and panel each doing equal work. And unlike one of the usual presentations you might attend, the learning flowed both ways, from industry experts both on stage and in the audience. And what learning it was!
Two questions demonstrated better than ever the degree of transformation occuring in those brokerages who are committed to being market leaders. And the answers from both sides of the room proved that, no matter what the struggle, the industry continues to be flexible, innovative and dedicated to its customers.
[Note: The following is paraphrased from each participant, purely from my memory; no exact transcript was used and it’s certain that the audience and speakers were much more eloquent and insightful than my recollection. I have tried to encapsulate the excitement and energy of the discussion, including some of the questions and answers that stuck out in my mind. I think you’ll get the point.]
Steve Harney: Stop thinking of it as recruiting; and start thinking of it as “rescuing” those agents who are at risk of leaving the industry altogether. The biggest danger to the industry today is that experienced, capable and trained agents associated with failing companies may throw in the towel completely if their organization goes under. Focus on these knowledge-experts first and go rescue them before we lose them completely.”
Audience member: What about younger people who aren’t in the industry yet? How do we attract them – since they aren’t really “rescue” candidates yet? Do you think we need to offer them salaries?
Matthew Ferrara: Agent compensation isn’t why people join real estate, nor a major reason for performance or non-performance. And younger people are more likely to respond to the “sky’s the limit” proposition than “it’s $20 per hour salary.” The top agents in the world are paid on commission; the worst agents in the world are also paid on commission. The common factor – being paid by commission – isn’t the deciding factor in their performance. It’s management, which creates a performance environment for them, provides the right tools and the knowledge on how to use them rightly, and shows agents what it takes to build a career. Some may never become “superstars” but most should still be able to create viable long-term careers. But that means recruiting agents who are focued on selling to the customer, and worried less about how many ribbons and pins their competition has on their chest.
Audience member: One of the biggest lessons we learned is that when you’re trying to attract younger agents, you don’t want them to be interviewed by their 25-year-plus peers. It’s hard to create a connection with them if they feel like they’ll be working with people their parents’ age that don’t seem to connect with them in the same way.
Mike Staver: That’s where leadership comes in. You have to ask yourself, why would anyone follow you? Do you inspire them to stick with you because of a viable, visionary mission, or just because you are the boss. Age can become less of a barrier if your mission is exciting – and the leaders of your company, including yourself – are committed to it. That’s how to connect with people; not just because you all have the same iPhone.
This kind of back-and-forth happened for two-plus hours. And I found myself more energized by what was being asked and offered by the audience as much as by my peers in the front of the room. Then the “biggie” question hit:
Mike Staver: Let’s ask the audience a question for a change. What is it that the real estate industry is “pretending” not to know? In other words, what is it that we all go back to our offices and ‘know’ is our biggest concern, but we’re pretending like it doesn’t exist?
Audience member: That someone will come along with a model and blow away all traditional brokerage. Redfin and Foxtons almost did it. What if the next company that tries succeeds in finding that formula?
Audience member: That we don’t really know what the customer experience is like because we’re always looking at it from the inside out. Even when we try to measure and survey our performance, it’s really designed and analyzed with the answers we wanted to hear anyway.
Steve Harney: That on December 31, we’re going to have the biggest day in American history for expired listings. And on January 1, will our agents be prepared to take advantage of the situation. And are we sharing this information – including the upcoming shadow-inventory that’s also going to hit the market – with our sellers so they understand what the real market looks like and we can advise them to make good decisions?
Matthew Ferrara: That the real estate industry still works too hard, in general, and produces to little, per person. It’s the easiest business in the world that we make harder than it has to be. Most agents put in too much effort and time to make less income than a coffee barrista. Even the successful agents spend more time trying to make $100,000 than top performers in other industries. I think the biggest thing we’re pretending not to know is that our production model isn’t keeping up with the modern world and that the era of 60-plus hour workweeks, inefficiency and redundancy, is slowly killing our current top performers and scaring away our potential future ones. And it’s bankrupting too many brokers along the way.
It went on like this for the rest of the afternoon; and it continued later in the restaurant downstairs. Not all questions had “final answers” and many answers created new questions. But the real lessons from the day wasn’t the ideas shared on the various topics, or the discomfort some people showed when asked to challenge their assumptions. The real lessons could be seen during the break, and in the side conversations after the session: Brokers talking to each other and to the speakers with one common theme:
Sure the business is changing, and the future is unknown. But dammit, I’m going to be a part of that change this time around, not wait for it to hit me on the head and then try to catch up.
As Peter Drucker once taught, “The best way to predict the future is to create it.” Yesterday, in Manhattan, a hundred brokers, three thinkers and representatives from the network of Leading Real Estate Companies of the World began learning that lesson. And creating their future, one question at a time.