When Change is Necessary, Turn Challenges into Opportunities

Dennis Walsh, CEO of Dennis Walsh & Associates shares his thoughts on RISMedia’s CEO Exchange
Dennis Walsh, CEO of Dennis Walsh & Associates shares his thoughts on RISMedia’s CEO Exchange

RISMEDIA, September 1, 2006?Blue skies and sunshine over the Rocky Mountains painted the background for the two days of the RISMedia’s CEO Exchange event at Sanctuary Golf Course in Denver, Colorado I was honored to enjoy this opportunity to experience the presentations and discussions among many of real estate’s brightest minds and most progressive leaders. As some of the industry?s most pressing issues were brought to the table, it would be an understatement to say that ?lively discussion? ensued.

Within the context of discussions on demographic segments, the impact of the Internet and the proliferation of new business models, an important underlying message seemed to resound with those in the room ? we are currently facing times where important decisions must be made regarding the future of our businesses. After a number of exceptionally strong years, what new directions and initiatives are necessary to position ourselves for the next several years and beyond? Every broker and agent must decide whether to continue his or her current approach to doing business or whether to change. These changes include new approaches to marketing, communications, service models, management styles and much more.

As the event continued, CEO Exchange panelists and participants shared great ideas and insights, offering examples of the changes they had made or were initiating to remain competitive in the real estate industry of today and tomorrow. And while most agree that at least some level of change is necessary, the next questions we face are: What will this change look like? And how will it come about? Looking back on these discussions, I?d like to offer a few thoughts and suggestions.

Challenges or Opportunities

How are changes in the world of real estate viewed in your organization? Do both leadership and others in your company embrace change as a fundamental component of ongoing business strategy? Are there organizational, cultural or other barriers that may be limiting your ability to move beyond traditional business models and methods? Are new ideas and new models considered challenges to your way of business, or opportunities that allow your company to better meet the needs of the marketplace?

It’s clear to me that those who have enjoyed the greatest success in bringing about change as well as flourishing in a changing environment, are those who see new opportunities as opposed to challenges. No one can argue the success enjoyed by RE/MAX International as Dave and Gail Liniger pursued the opportunity to grow a network offering a different model for agent compensation. As a CEO Exchange panelist, Bob Hale shared the story of broker members of the Houston Area Board of Realtors? working together to create a powerful consumer-targeted website.

This unique site has driven many thousands of leads to these brokers at very little cost and without intermediary referral fees. In fact, these efforts have resulted in creating the fourth most popular site for online real estate seekers. To make this happen, both H.A.R. and its members focused on this project as an opportunity to control their own destiny.

For almost 18 years my company has enjoyed the pleasure of working with many brokers and associates who recognize opportunities to be found in working with builders and new home buyers. Through our Certified New Home Specialist ? certification program, we teach them the specific skills and strategies required to pursue and build success in builder representation and new home buyer representation. In other words, they learn how to overcome significant challenges to reap tremendous rewards and open doors to more opportunities that would not have come about in the context of a traditional business model.

Initiating Change ? Internal or External?

Once we decide that change is necessary, how do we initiate it? Another topic of great concern at the CEO Exchange was how to initiate significant change in an organization that has done business along the same fundamental lines for many years. It was questioned whether a substantial change in a brokerage model could effectively be made without literally starting a new organization from the ground up. For example, what if a traditional brokerage began to change commission structures, breaking out some areas of service on a simple fee or hourly rate basis?

One example to consider is the bold decision made by Toyota Corporation as it launched its new Lexus line. With the tremendous goodwill established in the Toyota brand, why not introduce the ?Toyota Lexus?? Could it possibly make sense to abandon the tremendous cost savings to be enjoyed by amortizing an existing dealer and service network?

Apparently Toyota felt it did. At enormous expense, they built a completely new brand and a completely new dealer and service network from the ground up. Why? Because Toyota was known for delivering great reliability and sensible design at reasonable prices ? not prestigious, high-style luxury automobiles. The target buyers for the new Lexus were driving Mercedes, BMWs, Jaguars and Cadillacs ? and would simply not identify with a product branded as a ?Toyota.

If we are to initiate substantial changes in our organizations, I feel an important starting point is to first break down the change into internal and external components for the company. This distinction can be helpful in designing your plan, whether evolutionary or revolutionary.

As it relates to this analysis, internal changes are those that, in general terms, impact your employees and the way they work. These might include changes to foundational company culture, leads distribution, referral programs or commission structures.

External changes are those impacting your customers ? and includes details relative to the essence of your brand. An example here would be a company that decided to position itself to cater to a specific demographic or psychographic segment similar to the Toyota/Lexus example.

Of course, most major organizational changes impact both internal and external areas of our business. Such would be the case where substantial changes are made to fee or service delivery models.

As Dave Liniger noted in the CEO Exchange, significant changes in the mindset of employees takes time and patience as management shares its vision and builds support for new initiatives ? but there are times when it must be done. In my mind, one of the most powerful assets of any organization is its ability to effectively initiate these changes. I think more than ever before, one of the foundational cultural elements for a company to strive for is a pride in the ability to change course as needed to meet customers? needs, overcome competitive challenges and make the most of new opportunities.

As for external components, a question some of us may have to someday answer is whether we need to initiate change in our business that amounts to completely redefining our brand. Most importantly, the very meaning of our brand and what it stands for in the minds of consumers is at stake. Do we attempt to salvage the long-term investment made in our current brand? Can we undergo an evolution of what our brand means to prospects, or do we start again from scratch? Will the customers we seek only respond to a brand that represents something completely different than what we stand for today? Difficult questions and big decisions.

Open Doors and Open Minds

As the two days of CEO Exchange unfolded, another message that came to the forefront again and again was that our industry is changing at a faster pace than ever before. If we are to succeed, we need to consider new marketing tools and programs, new management styles, new strategies for growing our organizations ? in short, we need to be open to entirely new ways of doing business ? evaluating and initiating them more quickly than in the past.

As a service provider and partner to real estate franchise systems and brokers large and small for almost 18 years, I?d like to offer one more suggestion. More than ever, I feel it’s critical for you to assure that your organization is truly open to exploring whatever new alternatives and opportunities that may be available to support your success.

For as many years as I’ve been in this business, I’ve been amazed at how difficult it can be to simply initiate meaningful conversation with some real estate companies. With unbelievable opportunities right outside their doors, it’s surprising how many brokers and their management are simply ?too busy? to sit down and consider new ideas.

Are your company?s executives accessible to those who may offer new tools and opportunities? Do you give these new opportunities the attention and consideration they deserve? Are there others in your organization keeping these new ideas and opportunities from reaching your top decision makers? Does the culture of your organization place so much value on ?the way we do things now? that your people fail to recognize the significance of new ideas?

I recently enjoyed a conversation with a real estate executive friend very excited about a new approach to management he was adopting. He had learned about a highly-successful publicly traded company that made it a mission to explore every possible new idea, strategy, program, service, etc. they could identify. Rather than overlooking even one simple idea because they were too busy or somehow inaccessible, this company would hire additional employees if that’s what it took to make sure they had the manpower and time to explore each and every idea or opportunity that may contribute to their success. Even ideas that appeared to be completely crazy at first glance, he explained, were given full consideration, since some of the best ideas in the long run often appear a little ?far out? in the beginning.

At one point in a CEO Exchange session, panelist Sherry Chris, COO Prudential CA/NV/TX Realty was sharing details of various new online marketing programs and alliances they were pursuing. We don’t know at this point whether all of these partnerships and programs are the right thing to do,? Chris explained, ?but we’ll never know if we don’t try them and measure their impact on our business.

As a direct result of initiating this same philosophy for only a matter of months, my executive friend feels he is already significantly transforming his business and his prospects for success in the future. Those of you who already work this way can attest to the power of this approach. For those of you who don’t, how will you remain competitive and profitable in our changing world?

At the end of the two days of the CEO Exchange, the sun melted into the Rocky Mountains in a dramatic show of color. Just as that sunset will punctuate the end of each and every day, our industry ? its technology, customers, market needs and business models ? will change. We must see this change as an opportunity and not a challenge. We must take the time to explore every possibility and recognize that solutions to a challenge present powerful new opportunities. We must embrace new ideas and the changes necessary to maintain and grow our competitive position and capabilities. Together, we must open our doors and open our minds to these opportunities to assure a future of success and prosperity.

Dennis Walsh is the CEO of Dennis Walsh & Associates, based in Newport Beach, California. For more information, visit www.denniswalsh.com or e-mail
info@sellnewhomes.com.

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