We love companies that make bold moves. That’s why the latest move by Semonin Realtors deserves a look by anyone in the housing industry that needs to move forward, if the want to help consumers move in the future, too.
First, a disclosure: Semonin Realtors is a client. Now, let’s move on.
There’s a saying in economics: When a recovery is in the making, you start to see the green shoots. Little sprouts of growth, in different forms. An uptick in sales. A perceptible change in consumer confidence. An innovation.
A bold move.
That last one is our favorite, and exactly what we saw last week, when we heard that Semonin Realtors in Kentucky was throwing away the “traditional” real estate playbook for something new. Something so new, in fact, that it represents a very innovative look at the future of real estate. Here’s their plan:
Semonin will close down its “daisy-chain” model of offices throughout Louisville, and move hundreds of its agents and staff to one central campus in the middle of town. It will retain a few strategically placed, small but efficient, satellite centers, mostly for convenient meeting spaces. And it will empower its agents to maintain full market coverage by maximizing mobile technology, rather than office space.
Don’t be fooled. This isn’t your typical cost-cutting reaction to a recession. They aren’t just shutting down offices to save costs. In fact, it’s probably fair to say that the money saved in leases will be reinvested in technologies, training and customer services. Nor is this simply a “brick and mortar” company going “virtual” because they aren’t simply sending all their agents home. Semonin plans a very active, very functional central campus. One in which technology and people work together, not work apart from each other.
Peter Drucker would be proud.
Actually, you can hear Semonin explain their reasoning for themselves, by watching the video. But if you want to know why we think this is brilliant, read on.
Semonin’s leadership is undertaking a very big mission. They aren’t just modernizing the physical structure of their company: They are modernizing the management theory of their company. Specifically, they are discarding the old “outpost” model of multiple offices and creating a central, shared-knowledge-and-experience campus that is the hallmark of every successful business in the world. There’s a reason Microsoft, Apple and Walt Disney all have corporate campuses. Modern management understands this.
In fact, the new “central hub” approach to real estate is long overdue. Only rapidly cycling housing bubbles have sustained the wasteful, redundant and dysfunctional model of multiple office locations over the last thirty years. Except this time, it’s different. There won’t be a big boom to paper over the costs of office space expansion in the future. Moreover, the classic redundancy-model contributed to no end of waste, costs, and under-utilization of talent, and mostly still does.
Semonin’s move to a central campus dispenses with these costly trade-offs for “location” with one bold move.
Working from a central campus lets Semonin rewrite the rules of managing its company and empowering its agents. Now, each contributor can do their best for all of the agents, not just the ones who were assigned to their office location. The best coaches will coach, the best planners will plan, best troubleshooters will solve, and best supporters will help everyone. That’s how companies normally do it in America. (The housing industry has just taken an extra century to accept the division-of-labor theory.)
It will be a boon for agents. Now every agent can catch the infectious enthusiasm of new agents who join the company. Everyone can watch and learn from the best top agents, not just the ones who might have been in your old branch. They can share and support and nurture and grow each other – and act as a company. The rising tide really does lift all boats. Likewise, they can hold each other accountable, to contribute, show up, perform.
They can leverage the creativity of each individual, and channel it into the power of their collective efforts.
Customers should be delighted. Centralization has long proven to create desirable outcomes for consumers: the most important being consistency. Future customers will visually understand the power of an entire organization working for them, not just a single agent in a single office in a single corner of town. When they come to a meeting, they will experience the energy, technology and presence of the total brand. It’s no different than meeting a doctor at his hospital campus, even though they once came to the house with little black bags (yes, I’m old enough to remember).
Finally, let’s not forget that central to this campus model of management is the adoption of mobile technology at the heart of the organization. Semonin’s move doesn’t just encourage its agents to use an iPad, cloud computing and wireless tools: It commits them to it. While the campus itself will be bristling with tools and resources, the model will only work if the agents become proficient at mobile productivity. Having worked with them, I’m confident they can reach do this, and Semonin is clearly investing the time, resources and staff to making it possible for every one of their agents. But it sets a new bar for the industry, locally and perhaps nationally: mobile-empowered sales people are not only the wave of the future, but the standard at Semonin Realtors.
That’s a bright line in the virtual sand.
Is this model for everyone? Of course not. There are many ways to create efficiencies, economies of scale and consistent performances in multi-location organizations. Many will operate quite competitively with multiple offices, using other resources, such as massive scale or strict management structures, to compete in the future landscape. It’s not for everyone.
Yet it would be a mistake to dismiss Semonin’s move as centralization only. It’s more than that; and it holds a lesson for every organization.
It’s optimization. At the heart of the change is an understanding that the future of all companies requires organizations to be structured in ways that let people do what they do best, every day. That structure isn’t always the multiple-office model, which have traditionally asked agents, administrators and managers to do tasks they were neither good at or enjoyed (think: recruiting or training). Going are the days of “jacks of all trades” for managers and agents, not just because there are fewer, but because ultimately they are unprofitable on the scale of today’s industry. There’s a reason why teams are so productive: they understand the division of labor. Semonin isn’t just preparing its people for a more efficient way to sell real estate. It’s preparing them for a more valuable way to contribute to their client’s, their company’s and their own success.
Rather bold, we’d say.