Hi, this is Steve Murray, president of REAL Trends. In a series of new podcasts, I will tackle what I consider to be the biggest issues facing men and women who lead brokerage companies today. In this special podcast, let's delve into leadership. Like many men and women in this industry, I have read dozens of books on leadership, from Jim Collins, to Patrick Lencioni, to Peter Drucker, to ... Well, you get the point; there are a lot of very good ones, and every one of them has really good nuggets. If you have the time to read, there are lots of good writers on the topic.
I've had the privilege of consulting with and talking with hundreds of men and women who own brokerage companies in this industry, and some outside the industry, at the local and national level, and I want to offer this to all the men and women trying to run brokerage companies and navigate everything going on out there in the world of residential brokerage.
First, I have been known to say over the last through years that this isn't really a complicated business. You need to recruit talent, develop talent, and spend less money than you have coming in. And that is very simplistic, and kind of funny, but it is very important to keep our minds on the fact that recruiting and developing talent is the only way to success in the residential brokerage business. And lastly, of course, you can't stay in the business unless you're making a profit.
But let's go a step beyond. What are the attributes of the best men and women in this industry? Great leaders that I've known in our industry, those who have successfully built and run brokerage companies over a long period of time have a few things in common. I call it my four Cs, and I'm probably borrowing from others.
First, these great leaders are competent people. They understand the business. They understand the relationships, and behaviors, and incentives that make a residential brokerage company work. They understand how important it is to have effective communications. They understand these things. They're competent, and they know what the business is all about. Most importantly, they know about relationships with their staff, with their managers, and with their agents, and the best spend extraordinary amounts of time building those relationships and listening to what those in their organizations have to say. So competency is extremely important.
Number two is clarity; clarity about who are we as a company, what are we trying to achieve, what behaviors are acceptable in our business. And that takes obviously, again, a lot of communication, but clarity of our mission, our vision. Who are we? What are we trying to accomplish? How are we going to accomplish it? What are we prepared to do? And of course, be extremely consistent, another C. But let's come back to that.
Communication obviously goes without saying. If you're not good as a leader, at communicating what our goals are, what our objectives are, if you're not into that kind of communication, if you don't use both verbal and written, both in small meetings, small groups, and large gatherings, and you're not absolutely consistent and regular with your communication, you're going to have a great deal of trouble. I think some of the best examples of that with the onslaught over the last few years of these new, if you will, disrupters. It is like brokers are besieged by news about Offerpad, Opendoor, Compass, eXp, HomeSmart, Realty ONE Group--the sky is falling.
And yet why are so many brokerage companies still doing, even in a down housing market, still doing well even with all this going on? What we note about these people is, I promise you, they got their head in the game. They are clear about what they're trying to do. Inside themselves, they're clear. I know who I am, and I know what I'm trying to accomplish, and I know the kind of company I want to have. Further, I'm clear about that with all of my people, and I use communication, constant forms of communication.
One note on this: A lot of good brokerage companies know how to communicate vertically. They can talk to a group of agents and managers, and/or they receive communication back and information back. But far too few promote, and support, and encourage horizontal communication, between the agents of your firm, between the managers and the staff of your firm. Very little time and effort by, let's say, the mediocre to good brokerage companies. There's just not enough opportunity to do that. So communication is hugely important, both vertical, which is more common, and horizontal, which far too many people oversee.
Lastly, leadership is the commitment. It's hard to explain to someone what commitment looks like. I think everyone listening to this knows it's a series of behaviors. It's a series of signals, and communication, and all kinds of things, but how are you communicating as an owner, or a manager of an office, about your commitment? Are you in before everyone else? Do you remember birthdays? Do you remember anniversaries? Are you thankful for the people who are with you? Are you gracious to those people that you want to have with you? Are you gracious to those who are leaving you? Are you game on, so to speak? How do you exhibit that in front of your people?
It's so simple, and yet so hard. Commitment is hugely important, and it embraces the competency, the clarity, consistency, and communication. And you may have all of those, but if you cannot get across your commitment to the health of your company and success of your company in every way possible, you're missing the most important attribute.
And what do all these things do? Well, they create probably the most important thing, which is trust. We're talking about enormous outputs of personal energy to accomplish these things, but what they all funnel to is trust, in your organization, in you personally. We have noticed for years, in all the mergers and acquisitions we've done, over 750 at last count, you can change the brand name of a brokerage company.
You can fiddle with the commission program and fees. You can even in some cases move physical locations, and we've noted that often, there's not a lot of loss of agents. But when managers leave, or when leaders leave, and change, and depart, then you're going to be faced with real loss.
Why is that? With all the emphasis put on brand, and technology, and marketing, why is it that we see the most breakage or loss of agents when the leader leaves? Well, it's because for better or worse, the men and women of your brokerage company, at all levels, staff, management, other leaders, and particularly agents, they watch, and follow, and listen to, and observe the behavior of the leaders of the company far more than any of those people and those listening in on this would ever realize.
It is important, along with the Cs that I spoke of earlier ... It goes without saying that you must be truthful if you want to build trust. But interestingly enough, what I've noted about great leaders of brokerage companies, is they're not afraid to hold people accountable, not just for numeric results, but for behavior. How many of you listening to this, thinking carefully, would admit that you have allowed poor behavior, poor attitude, to fester in your own companies? I've made that mistake.
Everybody listening to this broadcast has made that mistake. But you know what? You don't have to keep making those mistakes. I can pinpoint hundreds of times in my career, working with your peers and your peer companies, when managers and leaders of companies finally were forced to act only to find out everyone was wondering what took them so long, and I'm sure everyone listening has had the same experience.
As Patrick Lencioni would tell us, it is important, moreover, to focus on results. It's a business. It needs to have the focus on results. What metrics are you measuring that point the way to success for your organization? And how do you highlight, and recognize, and reward behaviors and successes that are evidenced by those results? But again, all of those behaviors and all those actions lead to trust in the leaders. So that's what leadership means.
REAL Trends has been The Trusted Source of news, analysis, and information on the residential brokerage industry since 1987. We are a privately-held publishing, consulting and communications company based in Castle Rock, Colorado.
Accessibility: We are making efforts to be ADA Compliant. Should you have any challenges or questions please contact us at (303) 741-1000.