Book Review: Stephen C. Lundin, FISH!: A Remarkable Way to Boost Morale and Improve Results (2000).

Stephen Lundin’s Fish!: A Remarkable Way to Boost Morale and Improve Results quickly became a revered text in modern management styles after its publication a decade ago, particularly well-known for its promotion of “fun” in the workplace to motivate employees.  There’s actually a lot more in the book, though, than just its “fun”-orientation, particularly in its zen-like endorsement of “choose your attitude” and “being present” in the moment.

The lessons imparted in Fish are very simple and provocatively empowering.  The authors assert that employees in the workplace have the power to change their own attitudes about their work, creating a positive environment that will not only be more productive but happier in their lives.

Clearly, these are not novel ideas, but what gives them power is that Fish! uses as an example of this management technique the Pike Place fish market in Seattle, which is known for its lively fishmongers tossing fish to and fro.  The idea is that if these workers, who have very difficult jobs that are not particularly lucrative, can maintain an amazingly motivated attitude about their work, then so can anyone.

The four elements of the Fish! philosophy break down as follows:

1.  Choose your attitude

This is probably the simplest and yet most powerful of the ideas generated in the book.  As the authors state: “there is always a choice about the way you do your work, even if there is not a choice about the work itself.”  Workers choose the attitudes they bring to work: they’re either going to be miserable, or they’re going to be motivated.  If they choose to be motivated, and get in the habit of making that choice, they will be happier and more productive.  If you have to be at work, why not be great at it rather than ordinary?

2.  Play

The second, and more celebrated, element of the Fish! philosophy is to incorporate “play” into the workplace.  The idea is that you can be serious about your business and still have fun with the way you conduct business.  It shows that you’re not taking yourself so seriously, and that you understand the importance of good humor even in stressful situations.  The benefits of play are as follows: happy people treat each other well, fun leads to creativity, the time passes quickly, having a good time is healthy, and work becomes a reward and not just a way to rewards.

3.  Make their day

This is the core service concept of the Fish! philosophy: approach customer service with the goal that you’re going to make someone’s day.  Go out of your way to give someone a memorable experience working with you.

4.  Be present

The Fish! philosophy also incorporates an element of Zen-like attention to being present in the moment.  The authors point out that people in service professions tend to “zone out” in their work.  Because they’re so unhappy, just clock-watching and waiting for their shift to end, they don’t really pay attention to their clients or customers.  They’re not fully engaged in their work.  In the Fish! philosophy, you need to concentrate on being present in the moment, and being focused on the needs of your client.

Takeaways

This is a great book, and one that every successful real estate agent should read.  The simplest advice I’ve ever heard about maintaining a positive approach to business is this: “choose your attitude.” That’s it.  You have control over the attitude you bring to work every day.  If you choose to be positive, you’ll find that it becomes easier every day to become the kind of professional, and person, that you want to be.

Really, all four lessons from Fish! are worth remembering, including everything that Lundin has to say about great customer service.  This is a must read.

Book Review: Michael E. Gerber, The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

The E-Myth books are highly recommended by a lot of other business authors, and by a number of business people I have met. I found The E-Myth Revisited to be very flabby – lots of good insights throughout, but woven around a series of stories and staccato imprecations that made the book a tougher read than it should be.

Gerber’s “e-myth” is about small businesses: the myth that people who start small businesses do so for an entrepreneurial impulse, whereas he proposes that most people start small businesses because they love what they do and want to do it for themselves. The problem, according to Gerber, is that people who love, say, baking, make great bakers but poor businesspeople. To be successful in business, you have to love running a business, not baking pies. I did like this point, which I’ve paraphrased: The purpose of going into business is not to do a job, but to free yourself up to create jobs for other people — if you’re the main person working in your small business, then you don’t have a business, you have a job, and your boss is a lunatic. I thought that was well stated.

Gerber’s main passion, though, is about establishing a “prototype” for a business, such as a franchise model, which organizes and establishes the systems under which the business will run. The point is that a franchise prototype or model sets up the systems that if operated correctly will help a business succeed, avoiding the “reinventing the wheel” phenomenon inherent in running small businesses.
The core argument is that businesses succeed when we set up thorough, tested systems to run them according to a blueprint designed for efficiency, automaticity, and order. Gerber makes a great point that you want to build a system-oriented business, not a people-oriented business, so that your system leverages the abilities of the people you have rather than requires you to hire more extraordinary people. It’s easier, cheaper, and more efficient to build one model and hire 100 ordinary people than build a bad model and hire 100 extraordinary ones. He also points out that a good business has to have a documented operations manual that sets out the blueprint.

Gerber also sets out fundamental advice for business:

  • Innovate by testing new strategies for increasing efficiency or sales.
  • Quantify everything. Track all your numbers, so you know what works and what doesn’t work.
  • Orchestrate a system which eliminates choice – i.e., it eliminates opportunities for decisions to be made that are inconsistent with the master blueprint.

This was the best part of the book, and the salient theme of the book: work on your business, not in your business, and set up a prototype (operations manual) that automatically runs your business to avoid becoming too reliant on yourself or personalities.

Takeaway

One of my main passions is customer service systems, the idea that a customer experience can be consistently maintained by creating systems that automate client service. I read this book years ago, and went back to re-read it for this review, and was surprised at how much Gerber’s argument about a “prototype” had seeped into my subconscious as I built my own personal philosophy about building a great business. I can’t necessarily recommend the whole book, but the Part II section on creating that prototype is a brilliant articulation of how to build a sustainable enterprise.

Client-Oriented Real Estate in Action: The Guide to Grieving Your Property Taxes

The cornerstone of the CORE philosophy is that real estate agents should perform outstanding non-transactional services to their clients.  We call these “courtesy services,” because they’re not necessarily services that relate to actual transactions — meaning that we’re not going to be directly compensated for them.

But at the same time, they have the potential to create massive amounts of business down the line, from the good will that is created when you selflessly spend time, energy, and money to help someone by providing a service they need.

The best example of CORE in action is our Home Buyer Tax Credit information site that we created last year, which ended up providing the best information about the tax credit available anywhere in the country.  Over a three month period, we attracted over 75,000 unique users to the site, providing them with all the tax forms they need, and even answering hundreds of user questions on our blog.

Did we get paid for any of that?  No.  Did it take a lot of time. Oh yes, indeedy it did. But was it worth it? Well, even though we didn’t make much direct revenue from income on the site, I like to think that by providing such a great service, we helped at least the 800 agents that work at our company by inspiring them to do the same sorts of thing in their business, and by arming them with the best information available about such an important governmental incentive program.

Well, we’re doing the same thing today, launching a new initiative on our site to help clients and other people in the community grieve their taxes.  We have put up a comprehensive guide called the Guide to Grieving Your Property Taxes, which is now available on our real estate site and gives the best information available on the internet about grieving taxes in New York State, including:

Are we getting paid for any of this?  Not directly.  It’s done as a courtesy to our clients.  But unlike the tax credit site from last year, this is information that we will be able to use year after year, because the rules generally don’t change. So it’s an evergreen initiative.
But also, we will have some benefits from it, as follows:
First, because we’re hoping that all eligible sellers with Better Homes and Gardens Rand Realty, which is about 2,500 people, will grieve their taxes. If they grieve the taxes and are successful, that makes their homes more sellable.
Second, we might be able to get necessary price improvements to make our listings more competitive.  If sellers are going to grieve their taxes, they need to establish that their homes are worth LESS than the assessor believes.  They won’t be able to argue for a grievance if they have their home on the market for MORE than the assessed value.  So we might get some price improvements on it.
Third, this is the best possible reason for our 800 agents to call their spheres of support, the people that they cultivate for direct business and referrals.  We spend a lot of time and energy in a mailing campaign to our agents’ spheres, but it’s all about trying to give them a reason to call.  There’s no better reason to call than to urge a client to grieve her taxes, give her all the information she needs, and then help her by doing a CMA that can help substantiate the property value.
The point is that if you spend your time trying to provide great services to a client, you will eventually get value out of it.  That’s the foundation of the CORE philosophy, and now we’ll see how it works in action.

“THIS IS THE JOB”: Seven Things That Real Estate Agents and Brokers Do that Are Not Good Enough

In a post last week, I argued that the enemy of the good is not the great, but the crappy. That is, the classic cliche that the “enemy of the good is the great” has some truth for perfectionist types that have difficulty finishing projects because they’re never quite “good enough,” but the bigger problems in the real estate industry are actually caused by agents and brokers who  do crappy work instead of good work.

The enemy of the good, I argued, is that so many people settle for doing things poorly in situations where doing them great does not take all that much more time, energy, or money.

Why? Because sometimes those things are boring, or difficult, or take a lot of time. But like I tell my agents: THAT’S THE JOB!  The job is doing those things.

Put it this way. You know what job I don’t want? Being a mover. I really wouldn’t like being a mover. I hated having to move myself, and that was my own stuff. I’d really hate schlepping around with YOUR stuff.  When I lived in Manhattan, I had a four-story walkup, and every time I got something delivered, the guys (not being sexist, it was always guys) would huff and puff while they climbed the stairs, complaining about the walkup.

My reaction was always the same: “THIS IS THE JOB!”.  If I lived on the ground floor, I could carry my own stuff in.  The only reason I AM PAYING YOU is that it requires carrying heavy stuff up stairs, and I am a soft, pasty man who doesn’t like carrying heavy stuff up stairs.  So stop complaining about the job.

It’s like if you went to the dentist, and the dentist looked at you and said, “Oh, God, more teeth. I hate teeth.”  THIS IS THE JOB!

So let’s stop complaining about things that we have to do for our jobs. If we can do things the right way, and the right way requires just a little more work than the crappy way, then do it the right way.

I got some emails from people who asked for specific examples to demonstrate the point, and I came up with exactly seven. Not nine, not six, but seven.  Amazing how that always happens.

So here are seven things that most agents and brokers could do that would be great, but most do crappily:

1.  Crappy Pictures of Listings

This is one of my pet peeves about the real estate industry.  Even thought great pictures of listings are the single best way to market a home, most agents take too few pictures, and take them poorly. It’s like the old joke: the food is bad, and the portions are too small.

There’s no excuse for this. Good digital cameras are cheap, and if you learn how to use them they can take really great pictures. You just need a decent-sized sensor, a wide angle lens, and a basic understanding of lighting.  And then you just need to keep snapping. Most MLS systems allow for a lot more pictures than most agents submit, and some allow for high-resolution photos. Instead, though, you’ll see a listing for a high-end property that has 4,000 square feet, a pool, and two acres, and you’ll get eight pictures with none of the pool, or the grounds, or half the rooms.

That’s unacceptable, and it’s not because the agent was trying to be great and thus couldn’t be good.  The agent was willing to settle for crappy.

2.  Crappy Property Descriptions

The same goes for property descriptions. It takes a little time to sit down and write a good property description, one that engages the reader, describes the entire property, and inspires buyers to want to see it. Probably not a lot of time. Not as much time, for example, as it took me to write this post, but a little time.

But most agents under self-imposed pressure to get a description done in the inadequate 24 hours that most MLS’s require to get listings uploaded will just dash off a couple of cliches, use abbreviations as if they’re under a strict word count, and just leave it there like a festering pile of crapulence for the entire listing term without every revising it.  Not good enough.

3.  Crappy Listing Information

What are the taxes? What is the square footage? Does the property have an updated certificate of occupancy for the new porch or downstairs bathroom?  That’s something that buyers need to know, and listing agents need to provide. But most agents never confirm the taxes, never go to the municipality to get the property card to confirm the C/O, and are often afraid to provide estimations of square footage for fear of being sued if they get it wrong.

But that’s the job. You’re brokering a piece of property. How can you do that properly if you haven’t confirmed that the property is legal.  All that’s going to happen is that the lack of the C/O is going to show up on a municipal search and delay the closing. Or you’ll get the taxes wrong and the buyer will demand some sort of concession. And even if you get the square footage wrong, just make clear in listing that it’s estimated and you’ll be pretty much safe from lawsuits.

Getting that information, and getting it right, is not a lot of work, and it’s the job.

4.  Crappy Broker web sites.

Okay, we’ve hammered the agents enough, what about the brokers? Most broker websites are abominable.  Indeed, most brokers don’t even have a website, and it’s 2011.  I can set up a reasonably professional website with a dedicated domain in bout two hours for less than $100 to write Star Trek fan fiction, and brokers who are selling millions of dollars in real estate every year do not have a website.

And even if they have a website, most of them are pretty crappy.  I’m not talking about “crappy” in the way that the smart guys at 1000WattBlog talk about real estate websites that are not intuitive or up-to-date or client friendly, and have the challenge of competing with well-funded national sites like Trulia or Zillow. I’m talking about stuff like this (no names or links, because I’m not trying to disparage anyone personally):

  • A local competitor of mine in Orange County, New York, one of the top 3 brokers by marketshare in the area, whose front page of the website has two paragraphs of text with three grammatical errors and discusses all of its 2009 accomplishments.  2009!!!!  Obviously, one of the 2010 accomplishments did not involve updating the website…
  • A local competitor of mine in Rockland County, New York, one of the top 5 by marketshare, whose website has scrolling text, flashing links (smiley faces), about 50 link icons and over 80 links on the sidebar.  80 links!  Lots of stuff I don’t even know what it is, but I did find the “Contact Us” link there, coming in at number 75, right above the “Find Your Agent”.  Can you imagine sifting through 75 links to find a “contact us” page?
I could do this all day, but the fact is that at least those companies have websites. By my calculation, about 35% of the business in our market is done by companies that don’t even have one.  That’s seems odd, given that the internet has kind of become a big thing.

5.  Crappy Agent web page pictures.

Earlier this year, my company had an “Extreme Makeover” training class for about 300 agents.  During the full-day class, we provided every agent who attended with new head shots.  The photographer was actually in the back of the room, and people signed up for times and would get up from the class to take their picture when it was their time.  Why? Because I was tired of low-resolution, lousy headshots on marketing materials and the website.

You can go get a good headshot for $40, and put it on every piece of marketing that you do. Or you can continue to have that cropped, low resolution photo that a friend took with a camera phone four years ago, and use that as the way you present yourself to the world.  Get a new picture.

6.  Crappy Disclosure Documentation

Disclosure documentation is a fact of life in the real estate business.  Every agent meeting with every client is supposed to provide a set of documents for disclosure and acknowledgment. If that’s the case, though, why are most disclosures so crappy? Why are brokers still requiring agents to provide clients, at the first meeting, when first impressions are formed, with documents that are fourth-generation copies of copies, on different-sized paper, all bundled haphazardly in a cheap folder.

It’s such a terrible system.  The first impression you make on your clients is that you’re too cheap to get professional forms copied. Brokers — find out what forms you definitely need for a new listing, and a new buyer, and get them bound together and copied professionally so that they look good, don’t get lost, and make a good impression. It costs a little more, and it takes a little more work, and you get killed on printing costs when the stupid department of state makes a technical change on the New York State Agency Disclosure form and leaves you with 5,000 extra copies of your bound disclosure packets that you now are going to use for mulch (okay, that’s pretty much just me, this year).

But on the whole, you make a better impression than when your agent has to root around in a folder looking for some grainy copy of a form that might have fallen out in the car.

7.  Crappy Industry Knowledge

Why do so few brokers and agents stay on top of what’s happening in the industry? Every year, I attend about four or five industry conferences. I see the same people there. We all know each other. But I’m shocked at how few agents and brokers actually attend these gatherings.

And for the most part, agents and brokers don’t even follow industry news.  Each week, I send out an email with industry and real estate news.  The biggest response I get is that the email is too long.  Too long!  It’s news about the industry we work in, with information that keeps us up to date about how we can best service our clients!

Imagine going to the doctor and he looks over at a pile of medical journals on this desk and says, “Oii, I hate reading all that stuff.”  Would you feel good about your upcoming surgery?

Yes, going to industry conferences can be expensive and a drain on your time. And, yes, trying to follow the unending stream of news about the industry and the market can seem like a full time job. But that is, after all, the job.

So do the job well.

Who are your clients? Ummm, your clients, dummy!

Whenever I am at an industry conference, I’ll hear a real estate broker make the observation that a broker’s real “client” is the “agent.”  That is, although individual real estate agents have buyers or sellers who are clients, a broker’s clients are actually the agents: the broker provides services to the agents, who then treat the clients, but the broker’s main role is maintaining that client relationship with the agents. The theory is that the broker does not actually have a relationship with the buyers and sellers, but only with the agent.

This is one of those observations that always seems clever when people say it, kind of a counter-intuitive perspective that is presented as a flash of insight.  Except, of course, that it’s become pretty much of  a cliche, given that I hear it at every conference.

More importantly, it’s wrong.  If you’re a real estate broker, your agents are not your clients. Your clients are your clients.  Your agents are your agents.  That’s why we call some of those people “clients” and some of them “agents.”  

And even more importantly, I think that it’s gone from counter-intuitive clever insight all the way through to cliche and now all the way to a pernicious system of real estate brokerage that elevates the agent above the client in the broker’s perspective.

Put it this way: a great real estate broker provides outstanding client service to buyers and sellers.  The main delivery system for those services is through the individual agents, so the broker does have a significant obligation to empower those agents with tools, technology, and training to provide that client service. And, of course, the broker has to provide a reasonable compensation system to incentivize agents to stay with the broker and do lots and lots of deals.  

But you cannot always serve two masters.  Too many brokers, I think, including me, sometimes elevate the agent at the expense of the client. Here’s an easy example: do you provide dedicated parking at your offices to your agents, or your buyers and sellers?  At our offices, where possible, we have dedicated parking spots in front of the entrance for clients. Why? Because we want to make it easy for clients to be able to park at the offices.  That’s a good client service.  But I know lots of brokers who leave those spots open for agents to park in, because the “agent is the client.”

Of course, this is sort of a cross-industry standard, because you can go to most businesses in the country and find dedicated parking for staff or important employees, but not for clients.  And if you go to any mall in the country at 9AM, you’ll find the first ten rows of parking taken up by employees of stores in the mall, who will squat on those choice parking spots all day long.  

But it’s not just simple things like parking spots.  For example, many brokers, including ours, provides for “call coordinating” of sign calls and online inquiries, which go first to the listing agent.  This can be considered a good client service for the seller, who is probably best served if an inquiry is delivered to a listing agent who has a tremendous incentive to try to sell that listing.  It also can be considered good customer (not yet client) service to the potential buyer making the inquiry, since the inquiry is directed to an agent who really knows the property.

But in a lot of cases, this is actually bad customer service for the potential buyer, made in the spirit of the listing agent being the client of the broker.  Although sometimes online inquiries are made about a particular property, at other times the inquiry is spurred by that property, but the customer would be better served by talking to an agent who is sitting in front of a computer and can dedicate as much time as necessary to fielding that call.  Instead, the inquiry goes to a listing agent, who is likely out in the field, with clients, or otherwise distracted and occupied.  It’s a good service to the listing agent, good for the seller, not necessarily good for the person making the call.

This is not to criticize call coordinating, but simply to give an example that treating the agent as a client is not always in the best interests of the buyer or seller who are the actual clients of the company. This one’s a close call, but only if you actually think that people who call into your company deserve the best treatment possible. If you actually think that your agents are your clients, then it’s an easy call.

Finally, while I understand the impulse to treat agents, particularly productive agents that drive the bottom line, as the clients of the broker, I don’t see why service to agents should come at the expense of the client.  The idea that you have to choose between treating your agents/employees as clients, or your buyers/sellers as clients, is a false choice that sends us down the wrong path.  I don’t think you can have a great client service company without providing great tools, training, and technology for your employees (or in real estate, your agents).  

Inded, other industries do just fine in adopting client-centric approaches that actually empower employees and treat employees fairly without adopting a “employees are the client” standard that we hear bandied about in real estate. For example, Zappos is one of the gold standard companies in providing great client service, but Zappos also has a legendarily empowering employee culture. In fact, the great client experience wouldn’t exist without that employee culture.

A great real estate company should be able to recognize that the buyers and sellers are the clients, and provide amazing services to those clients through an empowered, trained, and motivated workforce.

Book Review: Atul Gawande’s The Checklist Manifesto: How to Get Things Right — Achieving Operational Excellence in the Real Estate Industry

Atul Gawande’s The Checklist Manifesto is a  powerful book, one of the best and simplest articulations of how to achieve operational excellence that I have ever read.  Gawande’s message is simple: the world has become increasingly complex, and we need to actively create systems and processes that will simplify the tasks that we have to complete in our everyday lives.  His deceptively modest proposal: use a checklist.

Now, I know that seems almost stupid and simplistic at first glance.  We’re all familiar with checklists, and generally associate them with rote tasks, not with complicated procedures.  And we resist the idea that our professional performance could be improved by something so jejune as a checklist, almost as if a checklist would trivialize the important work we do.

As Gawande points out, though, that’s exactly the way a bunch of doctors felt the first time that a hospital administration tried to incorporate a checklist into one of the most common of medical functions — putting in a central line.  He recounts how a critical care specialist at Johns Hopkins Hospital devised a checklist to try to avoid incidences of infenctions in the placing of a central line.  Doctors all knew the basic steps for central lines: (1) wash hands with soap; (2) clean the patient’s skin for the placement; (3) put sterile drapes over the patient, (4) put on a mask, hat, sterile gown, and gloves; and (5) put a sterile line over the insertion site after placing the line.  Gawande called these steps “no-brainers,” the type of things that doctors know they are supposed to.  But the hospital found that in one third of cases, doctors were skipping at least one of the steps.

So the hospital initiated a simple checklist procedure to ensure that all the steps were taken.   Since the doctors were resistant to the intrusion, nurses were enlisted to ensure compliance with the checklist.  What were the results?  According to Gawande, they “were so dramatic that [the administrators] weren’t sure whether to believe them.”  The ten-day line infenction rate went from 11% to 0%.  Over a fifteen month period, the administrators projected that the checklist had prevented 43 infections and 8 deaths, saving over $2 million in hospital costs.

This was not an isolated result.  After the success at Johns Hopkins, Gawande recounts how hospitals in Michigan initiated a project to use a central-line checklist in intensive care units (ICUs) in hospitals throughout the state.  Here are the results:

Within the first three months of the project, the central line infection rate in Michigan’s ICUs decreased by 66%.  Most ICUs . . . cut their quarterly infection rate to zero.  Michigan’s infenction rates fell so low that its average ICU outperformed 90% of ICUs nationwide.  In the …. first eighteen months, the hospitals saved an estimated $175 million in costs and more than fifteen hundred lives.  The successes have been sustained for several years now — all because of a stupid little checklist.

These are among the powerful illustrations of the effect of checklists on operational performance included in The Checklist Manifesto.  In addition to the medical field, Gawande shows how pilots use checklists to ensure safe operation of aircraft (including an engaging description of how checklists impacted the famous “Sully Sullenberger” flight that landed in the Hudson River in 2009).  And he demonstrates how hedge fund investors use versions of the checklists to protect against making poor investments, including one vivid illustration of an investor turning down an opportunity when a checklist item turned up that the company’s owners had been divesting their personal holdings.

So how does this impact the real estate industry?  I think that our industry could learn a lot from The Checklist Manifesto about operational excellence.  The role of the real estate agent is significantly task driven, but those tasks can sometimes be overwhelming.  Just getting a listing on the market can require dozens of discrete operations: taking pictures, uploading pictures, writing descriptions, checking paperwork, ordering signs, inputting property data, double-checking taxes, etc.  We need to do these things every single time, but rarely do we see a company articulate a simple checklist to ensure that every listing gets that quality service.  The same holds for the far more complicated but necessary task of maintaining ongoing listings, when agents tend to get lost in the frenzy of daily activity and neglect the day-to-day communication and updating responsibilities they have to existing clients, leading to poor client experiences.

For the last year, my company has been working on identifying the “best practices” in the industry — the practices that ensure a quality client experience for both buyers and sellers,  with the idea of coordinating those practices into a series of checklists and a comprehensive  “Project Plans” that cover particular aspects of the real estate transaction.  The goals is to provide with a set of plans that can guide them through the transaction.  The point is not to limit them — people can always do more than is on the plan.  Neither is the point to demean their professionalism– it’s not that we think they’re NOT doing some of these things, but we believe that in a given case they might not be doing ALL of these things because of the overwhelming complexity of the entire task.

Most importantly, we think that these kinds of checklists make a job easier, by simplifying our lives.  Just like computers, we have only a certain amount of “RAM” in our heads.  Computers gain efficiency if they can move information from “RAM” to hard drive memory.  Similarly, most of us become more efficient if we don’t have to store tasks in our memory, but can reduce them to a hard copy that we can refer to anytime we need them.  An agent with a 30-item checklist for getting a listing on the market is going to be more efficient than an agent who has to remember all 30 tasks and whether she’s already done them.  (And it’s definitely more efficient for the agent sitting at the desk next door, who keeps getting a tap on the shoulder asking, “hey, what am I supposed to do next?”)

Finally, real estate professionals should recognize that if checklists can improve execution and performance in life-and-death situations involving surgery and airline flight, and in million or billion-dollar financial investing decisions, then they certainly can be used in the much less urgent field of real estate.  A real estate agent who feels that checklists are “beneath” her should be at least a little chagrined that pilots and doctors are using them to great effect.

Essentially, I think that The Checklist Manifesto should be required reading for real estate professionals; indeed, I would recommend the book for anyone who cares about achieving operational excellence in his or her field.  If you need proof, I’ve already purchased 50 copies of the book at my company’s expense for distribution to our management team, and have saved others as gifts for colleagues in the industry.  It’s a great book.  You should read it.

If you’re interested in some other information about the book, here are some links:

Atul Gawande’s home page for The Checklist Manifesto

144 Reviews (average 4.5 stars out of 5) on Amazon.

Steven Levitt, the author of Freakonomics

Malcolm Gladwell, author of The Tipping Point, Blink and Outlier.

New York Times review

Washington Post review.

Interview in Time Magazine.

Gawande interviewed on the Daily Show with Jon Stewart.

The Safe Surgery Checklist illustrated in a terrific clip from NBC’s ER.

What’s the Best Way to Build Marketshare? Make Your Clients Happy.

I was asked to speak on a panel this week at the RIS Social Media Summit in New York, with several other brokers about how to generate marketshare in a competitive market. It was a great panel, moderated by the peerless Allan Dalton of RIS Media and Top 5 In Real Estate, and I tried to make the argument that the best way to generate greater marketshare is to do something simple: provide a better experience for your clients.

My point was to try to get away from the three traditional methods of building marketshare, all of which were adequately covered by other panelists: (1) build a bigger army by recruiting or acquisition; (2) build a better army through agent development and training; and (3) generate more clients directly through company initiatives and programs.

And it’s not as if my company hasn’t been doing those things.  We’ve had some of the biggest acquisitions in our history in the last year, and a few of the most productive recruiting results (we just recruited one of the top agents in Orange County this week).  Moreover, we’ve run a few really innovative programs to attract clients, including the Home Buyer Tax Credit site we put up in January. As a result, our marketshare has gone up, probably by about 20% across the region.

Nevertheless, though, I think that the strongest way to build marketshare is simply by doing a better job for your clients, which requires a focus on actually improving the client experience and agent competence. I’ve been beating this drum for over a year, in my own company and on this blog, but I’m amazed to the extent that the training industry in real estate simply ignores the fundamental issue of client experience.  Training is all about lead generation, and not what you do when you actually attract a client.

That seems backward to me.  If you do a great job with that client, that client is going to work with you again in the future.  That might not do much in the next few years, since most clients wait 6-7 years between transactions, but in the meantime that client is going to refer you business.  And write about you online. And be a great reference.  All those things will do more to generate new business (and marketshare) than a fancy personal ad campaign or a prospecting plan.

I firmly believe that the best companies in the next ten years are going to emerge because they simply do a better job for their clients.  But I don’t see anyone scampering to take that hill right now.

The Real Estate Broker of the Future?

I was at a conference this week and one of the issues we discussed was the “Real Estate Brokerage of the Future,” a topic that has come up a lot in discussions at industry conferences in the past year. Unfortunately, much of the discussion drifted, as it tends to do, to a simple application of technology, particularly the effect of technology on facilities. The idea is that the brokerage of the future tends to be perceived as a less office-intensive enterprise, leveraging technology to free agents from an office, or at least from a specific desk in the office.

I have no particular problem with this thought. My company has 23 offices, with 23 leases, and hundreds if not thousands of desks, phones, copiers, etc. Any sort of evolution in the industry that allows us to reduce our cost footprint without impacting the services we give to agents or clients would be a good thing.

But I do think that I’ve been part of that “broker of the future” discussion a half-dozen times now, and it seems we always end up talking about facilities. Every single time. It’s sort of like a framing limitation to the discussion, that all anyone can think about is how brokers of the future will be freed from their obligations to pay for office space.

It seems to me that the “broker of the future” issue is larger than that, that facilities are but a small part of it. Indeed, I think technology is a relatively small part of it, and that people tend to overestimate the effect of technology on the industry. Of course, the internet and mobile technology has had a significant impact on the real estate industry, just like all other industries. Consumers are more empowered with information, and do most of their shopping online rather than in person. And agents have myriad more tools to market properties and attract clients than they did ten years ago. But all that technology hasn’t really changed the dynamic of the industry. People still list with brokers, they still go out with agents to look at properties. Agents now market properties on the internet, rather than the newspaper, but the basic methodology is just an improvement on the old process, not a whole new process.

Will that change? Maybe. Certainly, lots of people are spending lots of money and going to lots of conferences to talk about how the industry is doomed (i.e., the travel agent example), but those people have been saying that for a long time. I’d be curious to pull out an Inman conference agenda from, say, 2002, and look at the list of presenters who predicted the death of the traditional brokerage industry back then, and how many of those presenters are still working for that same company and whether that company still exists. They were wrong then, but it may just be a matter of time before these predictions of inevitable decline play out. Maybe.

That said, I do in fact believe that the industry will change, and that technology will have its impact. But if I were to guess what the “Real Estate Broker of the Future” would look like, I am less interested in talking about the superficialities of facilities, website display, commission models, or agent compensation models. If there is going to be a transformative moment, I think it is going to be something more foundational and simple:

Essentially, I think that the real estate broker of the future is going to be the brokerage that finds a way to deliver a better experience for the client, and a way to add value to the transaction.

It’s that simple, and that hard. I have no idea what the broker of the future will look like, whether it will be a virtual office or a single big office with 200 desks and no private offices or a broker that essentially acts as a landlord for agents rather than a partner. All those things are possible. But what I think it inevitable is that the only real estate brokers who will thrive in the next ten years are those that find ways to go beyond the traditional service offerings of the industry.

There’s not a company in the country that doesn’t pay lip service to service through various platitudes and slogans, but there’s also not a company in the country that I’ve seen successfully implement a service ethic that creates a different experience for the client. Better information. Better care. Better communication. Right now, brokers do not differentiate themselves on the actual service experience they give.

Why? Because they haven’t had to. Clients are just not that choosy. They pick the agent they meet at an open house, or answers their call on a sign, or responds to their internet inquiry. Some choose an agent by referral, or work with the agent who helped them last time, but even to this day a plurality, if not majority, of agents are not particularly choosy in selecting an agent. And because of that, they end up with the experience they bargained for: sometimes good, sometimes not so good.

That’s going to change. One thing that’s going to happen in the next few years is that clients are going to be more selective about their agents, and one of the selection methods they’re going to use is the experience of past clients, and the statistical performance of the agents. Agents who burn their clients, who are good at prospecting but not at delivering service, are going to find that a difficult transition. Agents who take a lot of listings, and never sell them, are going to find this a challenge.

So the brokerage of the future, to me, is the one that actually finds ways to improve the qualify of the service experience delivered by its agents. I don’t care how that happens, whether its technology or compensation or commission or whatever, but the companies that create better client experiences are going to thrive as brokerages of the future. And the companies who ignore the client experience are going to become brokerages of the past.

Five Things to Stop Doing in 2010

This past week, I gave a presentation at the Inman Connect Conference in New York with the great Steve Harney on “10 Things” real estate agents should do in 2010. My feeling was that agents are already doing too much, so I decided to talk about five things that agents should STOP doing.

Given that the conference is largely about technology, and that one of my main points was that agents should stop embracing technology, I thought it went rather well….

There’s also a short clip of Camilla Sullivan of Better Homes and Gardens Real Estate interviewing me about the Five Things to Stop Doing in 2010 here.

1. Stop Annoying People, Start Helping Them.
Stop annoying people on social media like Facebook and Twitter. In the last year, real estate agents (and other salespeople) got into social media in a big way, on the theory that this new frontier of networked communications would help them break through the barriers that clients have put on phones, email, or direct mail marketing. But all that agents have managed to do is provoke their contacts to create those same barriers in social networks, the same barriers that people put up to emails of listings they’re not interested in, or phone calls. They are deleting (or even worse blocking) your emails, and they’re using call screening to avoid your calls, because they don’t see the value in what you’re offering — random listings that they don’t care about. No one cares about your new listing that you posted on Facebook, any more than they cared about it when you emailed it around. All you’re doing is annoying people, who are now blocking you or using new tools to screen you out. If you want to be effective in social media, listen to people and respond to them, and provide them with information they actually need. Don’t barrage them with marketing nonsense they could care less about.

So what should you do instead?
• Get the real estate agents out of your Facebook account. If you need to, set up two Facebook accounts, or master the new techniques they’ve created to provide different “faces” to the world.
• Read what your clients are saying, and respond to it. People like it when you post comments on their postings.
• Post minimally, and only when you have something people would want to read.

2. Stop thinking about sales, and start thinking about service.
How many people here would list their home with more than 50% of the agents in your market? That’s amazing. We’re in a business where even the sales professionals don’t have a high regard for the people in the industry. It’s amazing to me that sales training is still so focused on sales techniques that were developed 50 years ago or longer. Sales training should be all about service training. We all need to do a better job for our clients, because in the future clients are going to choose us based on the service experience of our past clients, not based on our marketing pitch or our ability to talk fast and use personal power to influence them. If you do a great job for your clients, you’ll be rewarded. If you do a lousy job for your clients, all the sales tricks in the world aren’t going to save you.

How do you get there? Establish a set of bedrock best practices for how you will run your business, everything from a checklist for what you need to do when you get a listing to a set of protocols for how to communicate with clients. And apply that to not just your transactional clients, but your sphere. Everyone needs a great real estate agent, even when they’re not buying and selling.

So what should you do instead?

• Set expectations for your clients, and then meet those expectations.
• Find out what your clients want, figure out how to give it to them, then execute.
• Look for opportunities to “Bring the Wow” to your clients – opportunities to blow them away with one particular bit of service attention.

3. Stop talking, start listening
Whether you’re online on Facebook, or sitting in someone’s living room, you need to stop talking. Natural salespeople like to talk, because they’re good at it. But we all need to listen more. The biggest complaint I hear from sellers is about agents who come in with a canned presentation and talk for 45 minutes without stopping for a breath. The first thing you should say to every client you meet is, “tell me about yourself, and what you would like me to do for you.” Just like you enjoy talking, so do they, and there is nothing more flattering or engaging than a person who asks you about yourself. Stop thinking about your client meetings as “presentations” and start thinking of them as “consultations” in which you’re going to ask questions, and they’re going to tell you what it is they want. The more they talk, the more they confide in you, the more you’ll naturally build credibility with them. You can’t manufacture “rapport” – it comes naturally by showing a genuine interest in people and what their concerns are.

So what should you do instead?
• Approach any meeting with a client with questions, not statements. Stop presenting, start consulting.
• Anyone you meet, in any situation, find out what their needs are, and then figure out what you can do to help them.
• Post less, comment more.

4. Stop doing things that provide the false security of productivity without actual productivity
In real estate, we measure productivity by whether the activity has the tendency to generate opportunities for you to obtain a new client or better service an existing client. Business development activities are productive. Going to see the inventory is productive. Taking a class is productive. Reading a book that teaches you something about the business is productive. But blogging about your experiences as a real estate agents is not productive. It might be fun, and you might enjoy it, and you might be able to justify it because it gives you pleasure, which is fine, but don’t fool yourself that it’s productive. And stop telling yourself that you’re blogging about the joys and miseries of real estate because you might get referrals. If you work in Manhattan, or retirement communities in Arizona or Florida, you might generate referrals. But the chances of you writing about your real estate career in Des Moines, Iowa or Monroe, New York is going to generate a referral – the idea that someone reading your blog in Utah someplace is going to happen to have a client moving to Des Moines Iowa is just too remote to justify the time expenditure. Don’t do things that give you false senses of security – look how much I did today – without actual productivity. Agents talking to each other is not anymore productive when it’s online than when it’s in the coffee klatch.

I constantly hear from agents in my company who have this great idea of how to develop their business. They all have one thing in common: they eliminate the need for the agent to actually pick up the phone and call someone. Why? Because calling someone is uncomfortable, and hard, and people don’t want to do it. That’s fine. Accept the fact then that you don’t want to do anything hard to build your business. But don’t fool yourself that you can be successful in the real estate business without courting rejection. And don’t finish up your day feeling like you accomplished something when you didn’t do anything to generate a real opportunity to obtain a new client or service an existing client.

So what should you do instead?

• Identify the activities you engage in that actually generate new business for yourself, or help you service existing business.
• Lock in times in your schedule to engage in those activities. I don’t care if it’s an hour, or three hours, or whatever, but lock it into your schedule just as if it were an appointment with a client.

5. Stop embracing new technologies unless they help you do something you’re already doing.
New technologies are exciting and seductive, but they can also be massive time- and energy-suckers. Here’s the rule: if a new technology allows you to do something you were already doing, but to do it faster, cheaper, or easier, then it’s a great technology and you should learn how to use it in your business. Examples are voicemail, emails, facsimile, scanning, digital photography, GPS. All those things allowed us to do things we were already doing, but to do them better. So what’s a bad technology: one that seduces you into doing something that you never did before. You have to ask yourself – why is it that I never did this before. If you used to send out reports on the market that you’d write yourself, then blogging technology is probably great for you, because it allows you to do something you were already doing, but to do it better. But if you’re not a natural writer, if writing is hard, and if you’re not particularly good at it, then why all of a sudden are you blogging? Why are you using a new technology to do something that you never did before? The fact that the technology exists isn’t a good enough reason.

For example: Facebook. Facebook is a great way to connect with your network. But we’re already seeing people mis-use it , and my experience the bloom is already off the rose. You join, you link up with people you haven’t seen in years, you exchange some emails, but then you quickly realize why you lost touch with them, and now you don’t communicate anymore. A lot of fun, but if you’re making some massive time commitment to Facebook, you’re probably being seduced by a technology you shouldn’t be.

I know people hate it when trainers talk about getting back to basics, so I’m not going to say that. But we need to do a better job with the technologies we already have. We all know that most brokers do a TERRIBLE job marketing their listings just on the fundamentals: bad pictures, old pictures, not enough pictures, incomplete descriptions, abbreviations from the classified ad days, incomplete information. Put it this way, if you’re not writing good, solid, appealing descriptions of every one of your listings, you have no business spending time on Facebook.

Clean Windows Service — Getting Property Taxes Right

In a “World’s Best” class we had last week, agents in the class firmly made the point that a fundamental aspect of a great service experience is getting the taxes right. From a listing perspective, you have to go to the town or village to get the right taxes, not just trusting the seller to tell you what he’s currently paying. And that also means understanding that a property might have village, town, school, county, etc. taxes to pay – we’ve had problems in situations where the taxes quoted only included the village but not the town, or vice versa.

And from a buyer’s perspective, it means checking out the taxes yourself when your buyers get close to making an offer, rather than trusting the seller’s estimation. Why? Because taxes have a dramatic impact on affordability, a point I made on on the Market Intelligence blog today.

So if we’re going to have at least one central tenet of “clean windows” service, it has to be: get the taxes right.

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