If anything put fear back into the real estate industry lately, it was the sluggish first quarter performance. There are few valid explanations for it. Inventory is at a reasonable level and interest rates are low. People should be buying homes like they did last year. Rather than trying to figure it out, it is time to apply a healthy dose of resourcefulness into the business. The best way to do that is audit your expenses and your people.
A typical story
There are times when WAV Group finds significant problems in a business that management did not see. But that is rare. Most of our clients know the problem, but they lack the gumption to fix it. We interview directors and management as part of our strategic planning process. After about 3 or 4 calls, every other call begins to sound the same. Everyone knows what is in disrepair. The same thing happens with our customer satisfaction research. After the first day of the survey going live, little changes. The numbers just grow in support of identifying the company’s strengths and weaknesses. We do research, build consensus, develop action plans, and assign those action plans to individuals. The action plan becomes the key ingredient for making a company resource efficient.
Every year, WAV Group tackles this task with brokerages and MLSs. You would be amazed at what we find. Accounting departments are very good at paying bills for stuff that a business is no longer using. Now that the tax season is over, it is a fine time to take a close look at your budget and your business plan to make some critical decisions that will tune your business for success. It is also a good idea to create a calendar for contract renewals. You will want to provide yourself with a 120-160 day window if you are going to shop or replace a vendor. Regularly we see firms wait until the last minute and making a change becomes unreasonable. Oh, and make sure that you make contract modifications for favorable terms on agreements that you do renew.
A business needs to operate off of a sound strategic plan with clearly articulated goals. People and departments own those goals. They are tracked and measured. What we constantly encounter are people who play the blame game. They complain that because they are under-resourced, the goals are not achievable. If the goals were developed with sound reason, the only excuse for failure is the people executing the plan. Every organization has underperformers. Don’t be afraid to put them on notice or replace them. There is a healthy labor pool in America today. Leverage that. When the economy is sluggish, more talented, hungry, aggressive professionals are available at lower rates. Use this time to rebuild your team and make every department a center of excellence.
Tie compensation to Outcomes
Everyone in the company should be on a salary plus bonus structure. The days of hiding away in your department year after year, floating in mediocrity must end in your company today. Jobs that are marred in sameness and perpetuity result in bureaucracy, inefficiency, and often failure. Move people around. Cross-train everyone. Make the entire organization responsible for success and outcomes. Set a goal to do more with less because your people are strong.
Resourcefulness is a sharp sword. Be careful not to cut the heart out of your organization. Remember the film Rudy? It was about a boy who had a dream to play football for Notre Dame. He lacked grades, money, talent, and size. It was never going to happen on paper. But Rudy had tenacity. And even though that tenacity did not result in football success, the Notre Dame team found its spiritual leader in Rudy, a non-scholarship walk on whose football acumen was restricted to the practice team. Frankly, he out worked everyone. Teammates like Rudy can be the spirit of a company that drive success far beyond departmental acumen. But everything must be couched in moderation. Make sure that you do not create a work family that causes you to hold on to people that should be let go.
Its not too soon to plan your next strategic planning session. Give us a call if you would like a proposal. We will also be attending the NAR Midyear meetings in Washington D.C. Please call or email if you would like to schedule a meeting.