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Real Estate Leadership – A Fish Rots from the Head Down

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Commentary by Don Kottick

RISMEDIA, May 13, 2008-I recently read the article featuring Sherry Chris, President and CEO of Better Homes & Gardens, on RISMedia.com titled, “Why Every Day Should be Retention Day.” There was one particular part of her article that really resonated with me-the part about hiring an agent that fits your corporate culture. I then instinctively started thinking about the importance of leadership-specifically great leaders, and the direct correlation between leadership and culture.

Harvard’s Michael Porter, one of the top business strategists, offers that “sustainable businesses must have vision, passion, and culture together which are fuelled by innovation.” The absence of a great leader to guide the organization, even with this required mix of key attributes will probably not translate into a sustainable, ongoing concern.

donkottick.jpgApply this thinking to the real estate brokerage landscape in North America, and it is fairly transparent which operations have differentiated leadership and a clearly defined vision. Analyzing each of these respective successful brokerages, you will undoubtedly find the incumbent leadership teams have developed cultures conducive to success supported by a clear vision. According to Bill Phillips, CEO of 360Coach.ca and industry pundit, “Great leaders create the foundations and ensuing cultures that allow the members of their organizations to excel and be as successful as they dare.” Great leaders and cultures of success are synonymous, and it is very rare to find a culture of success without a great leader.

In one of my university business courses, I remember a professor saying, “A fish rots from the head down,” as a playful metaphor describing corporate culture. Over the years, I have witnessed first hand how important the role of a leader is in an organization in either creating a great culture, specifically a culture of success, or inadvertently developing a dysfunctional environment. No leader walks into a business with the intent of creating a bad culture; when it does manifest itself, the probability of success for that business decreases exponentially.

I was very fortunate early in my career to work with Simon Dean, former president and CEO of Royal LePage, as this visionary transformed the company from a declining, stagnating, bureaucratic organization to an innovative, technology driven company that subsequently achieved a dominant position in the market.

It does not take long to determine if a particular real estate brokerage commands a culture of success. I recently walked into the office of Nelson Goulart’s Signature Service GMAC and could feel an immediate wave of positive energy that seemed to transcend the entire office. It started with the receptionists greeting all the incoming guests as though they were all long lost friends. These same individuals answered the telephones in a truly engaging and helpful manner. The energy was evident, as various agents walked by the front desk interacting, laughing and cajoling with the front desk staff. Even from my temporary vantage point in the reception area, it was quite evident why this office was attracting top talent and growing at such a phenomenal rate.

I witnessed another example of a successful culture when I visited the offices of Rick Haase, Prudential Gardner in New Orleans. Haase has successfully created a true team environment and culture in his offices, by developing and rewarding a climate of reciprocity and support for both his sales team and the support staff. In order for Haase to arrive at this destination, he had to apply a rigorous selection process and even terminate some problematic top producers from the company. Haase was not adverse to forgo short-term financial gain for the long-term benefit and development of the ensuing culture of success.

One thing that has become abundantly clear to me is that great leaders do not necessarily have to be born great leaders. These traits, attributes and skills can be learned. Both Goulart and Haase credit their success as leaders to having witnessed and worked with other great leaders and visionaries over the course of their careers. They have also developed a network of mentors and industry professionals that they can access to discuss and brainstorm their ideas and challenges. A great leader rarely works in a vacuum. Even Napoleon had his team of advisors and generals that he called upon prior to executing his battle plans.

My experience has revealed that another commonly occurring characteristic of great leaders is that they tend to be voracious readers. They tend to consume a wide range of subject matter – not just limited to business material. Quite often there is a special focus on biographies of past and present great leaders, primarily for the purpose of extracting best practices and key strategies to put into action. These individuals also tend to keep current on macro and micro trends affecting both the economy and their respective industries. A great leader never stops learning or growing and subsequently adapting to meet challenges or embrace new opportunities.

According to Alan Scearce, senior vice president with John L Scott, “Great leaders are continually taking the pulse of their organizations and their external surroundings.”

These individuals take readings from their staff, from their salespeople, from their clients, from their suppliers and from the public at large. This extraction of information can be either through one-on-one dialogs, second hand information, organizational back channels, surveys, news and RSS feeds, blogs or other collected data or statistical information.

Great leaders through their monitoring process quickly uncover potential landmines or pitfalls in their organizations or within the sphere of influence. Once unearthed, the problems are dealt with quickly and effectively. In a real estate brokerage, problems can spread like wildfire if not extinguished quickly. Decisions to act must be fair; and in keeping with the overall vision and objectives for that organization; and they must adhere to the value system that has been instilled within the company.

Effective communication skills are another key attribute found in great leaders. Open and continuous communication reduces the possibility of issues or assumptions manifesting themselves into potential problems. Regular meetings with all members of the brokerage provide a forum to celebrate successes, but also ensure that the corporate objectives and values are being adhered to. Open and consistent communication is critical to the creation of a culture of success.

“Great leaders strive to and successfully develop an esprit de corps – and subsequently institute the framework for the culture of success for the organization,” said Bill Phillips. The Machiavellian approach to leadership (basically survival of the fittest) does not work well in the real estate industry as it diminishes or negates any attempts at executing team oriented goals or objectives. Great leaders work to create positive and supportive environments so that all members know where they are going and their output is maximized. Leaders walk the talk; they make the difficult decisions that ensure the culture stays the course.

Great leaders make sure all their internal leaders and managers have the necessary skills to lead their respective groups or departments. Great leaders are not afraid to hire the best even if these individuals are more talented than themselves. Carol Johnson, president of the Recruiting Network Pipeline, often borrows the mantra from the author Don Paullin, “Hire Hotdogs and Fire Baloney” to develop a truly successful organization.

Once a company has a mission statement and vision that maps the direction of the organization, it is the leader that ensures the appropriate culture is created and corporate wide buy-in is achieved and maintained. Accountability throughout the organization is critical as all members of the company need to know that top-down buy-in is implied. Execution of the strategic elements and the related tasks serve to create the employment branding experience, which impacts both the internal and external environments for a business.

Following up on this, the leader must have the courage to act and the perseverance to follow through on their plans, even when the going gets tough. After careful analysis of a particular situation, if a leader has ventured down the wrong path, they must have the fortitude to admit the need for re-alignment or corrective measures, and then move forward in the appropriate direction. Leaders are after all human, and therefore are granted some latitude when traveling in uncharted territory.

Leadership studies have revealed that great leaders must have passion; plenty of energy; they must have confidence; and they must have the ability to deal effectively with stress. Being a leader can be very taxing, but it can also be very rewarding.

Even though leadership is a moving target, the good news is that leadership can be learned. To be a great leader it is necessary to understand the importance of creating a culture of success in your real estate brokerage. Especially in light of today’s economic environment, the creation of a culture of success will not only attract new members, but it will also assist in the retention of the existing members. In summary, great leaders live and breathe continual improvement both for their organizations, as well as for themselves, as they know that nothing remains static for long in the business world, especially in the “new” real estate vertical.

Don Kottick is Vice President, Products & Services, for AlignMark, Inc.

For more information, visit www.alignmark.com.

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