The Question from Michael McClure:
“Here’s a topic I’ve enjoyed discussing many times with many people: is the “employee” brokerage model viable in real estate, and – on a related point – is there any correlation between the predominance of the independent contractor model and the overall level of professionalism in real estate?”
People love to blame “the model” and the independent contractor status of the individual real estate agent on the inability of real estate brokers to lead. Furthermore, they blame this model for keeping a truly consumer-centric brand from being established. I think it’s crap.
Where there is no vision, the people perish.
The real culprit, at every level, is an almost complete lack of vision, no clear, actionable values, and a misguided understanding of what brand really is. Our values are our true brand. Real estate agents aren’t following brokers because no one is giving them a good reason to follow. And if they did follow today, where would they be lead?
I’ve been pondering writing this post for a few weeks and a discussion on yesterday’s Harvard Business Review chat gave me the motivation I needed to actually do it. It is a conversation I’ve been having in depth for many years. The chat was dominated by a discussion of leadership, specifically as it related to vision and values. The need for a strong, unifying vision was not debated. The only real debate was whether this should come from a single voice – a strong, visionary leader – or whether it required a community/organizational effort to create. I don’t believe everyone can be a visionary, but I believe everyone wants to be associated with a strong vision.
Jesse Oguntimehin – @JesseOguns
.@joesat I may not be visionary, but work on a team after being sold on an awesome vision. @redtype #HBRchat
Another strong theme was that a clear vision is only the starting point.
Cathryn Hrudicka – @CathrynHrudicka
RT @sanchezjb: A3 Secondly leaders recruit, develop, & recognize ppl whose values & experience reflect the orgs purposeful culture. #HBRchat
The responsibility of leaders.
This deserves repeating: Leaders, real leaders, “recruit, develop and recognize people whose values and experience reflect the organizations purposeful culture.” The problem with most real estate brokerages is that they have no clear vision and have not articulated a set of core values. They have no chance of creating a “purposeful culture.” And that purposeful culture is where “brand” is really born.
A definition of brand: A commonly held set of beliefs about WHAT you deliver and HOW you deliver it. This was shared with me years ago by my mentor, Bill Leider. I think it’s critical to understand that the HOW of the delivery is what is completely in control of the broker who has set a clear vision and established a set of values that THE BROKER can live without fail on a daily basis. Actionable shared values are not just pretty words on a poster. Values are the dark matter of human relationships and the key to building an ecosystem that manifests those values. This is also NOT model dependent. It simply demands that the articulated values play a key role in how a business is run.
Raj Datta – @rdatta
Yes, at the core are core values, but then around it practices, policies, systems – an overall ecosystem that manifests the values #hbrchat
Raj Datta – @rdatta
Core values spell out the intent, whereas the ecosystem turns the intent into observable behavior #hbrchat
Observable behavior. Like great parents, great leaders lead by example. The ecosystem is squarely in their control. The fact that agents are independent contractors is not the reason why brokers can’t lead. It’s the real estate broker’s view of their agents and their view of their role in their own organizations that keep them from leading effectively.
If this is to change, a decision has to be made at the broker level to CHANGE how THEY view agents, how they interact with agents, and what responsibility they have to their success. That begins with a shift in their thinking, their own psychology. This behavioral change on the broker side will trigger new psychological responses from the “independent contractor” side. I think it’s possible to alter the psychology, even without a change in the fundamental nature of the relationship. And the result would be a complete change in how value is delivered.
Koraan Jamar Kenner – @KJKenner
@HBRexchange the how? create layers of thick value, w/ core mission th@ aligns w/ products/services; enter shared econ w/ sim biz’s #HBRchat
Translation for real estate? Real estate brokers need to create thick layers of value, guided by a shared core mission (vision), driven by a clearly articulated set of values and aligned squarely with the products/services desired by their clients. This is completely within their control, despite “the predominance of the independent contractor model.”
Why is there is a lack of professionalism in real estate? Because leaders are not leading, they’re wandering. Period.
Of course, you’re opinion may differ. I’d love to hear it.
photo credit: MikeBaird on Flickr