Industry Advisor by Jose Perez
RISMEDIA, October 27, 2010—Several years ago, I was having dinner with a senior executive of a large real estate organization who made an interesting statement that, I believe, explains why we continue to see brokerages resisting change: He stated that agents are afraid of consumers, managers are afraid of agents and owners are afraid of managers.
As a result of this ugly chain of events, agents cave on commissions, managers cave on splits and owners don’t hold their managers sufficiently accountable.
Many readers of this column have asked me to address how to implement change in their companies and highlight brokers around the country that are successfully breaking the mold.
It all starts with accountability.
The reason everyone is scared is because nobody is holding anyone accountable. Sure, we can say agents are independent contractors. Sure, we can buy managers telling us agents will leave if we don’t give them a higher split. Sure, we can let the inmates run the asylum, but is that really running a business?
Part of the problem is that real estate is a people business with lots of egos and emotions involved. However, if you build a culture of accountability, people will expect more from each other and will not want to let their teammates down.
Gino Blefari, founder, CEO and president of Intero Real Estate Services in Silicon Valley, believes that culture and accountability are central to the success his company has experienced since 2002. Without a single acquisition, Intero captured number one market share in Silicon Valley by 2009.
When asked about accountability, Blefari says he is a big fan of Charles A. Coonradt who wrote the books, Scorekeeping for Success and The Game of Work. He gives Coonradt credit for this quote, which sums up his philosophy: “When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates.”
Another successful company that has broken the chain of events I described earlier is @properties in Chicago. Mike Golden, president of @properties, had this to say about why his company has vaulted to number one market share in Chicago in less than eight years: “In order to be effective with change, you have to have the infrastructure to support change. Otherwise, you’re just floundering about…there are few things more frustrating to agents. So while we’ve always been focused on innovation, we’ve also been very disciplined about creating and maintaining the infrastructure that allows us to roll out new initiatives in a way that feels very natural.”
If brokerages can create a culture of accountability and innovation, they can be successful in spite of a still-difficult market. Those who are still scared don’t have a very bright future. Those who have faced their fears, hold their people accountable and continue to innovate will have all the opportunities they can handle.
Jose Perez is the president of PCMS Consulting, a full service consulting, sales and management organization that specializes in real estate industry issues.