It is probably inappropriate to play the blame game in this environment. Brokers are being pressured by market forces to create customized consumer experiences that include high value propositions and satisfying relationships between consumers and real estate service providers.
Managers on the other hand are being asked to work with one hand on the old system and one hand on the new. The new rules that apply to the traditional brokerage old system are nearly always in direct conflict with those that are being developed for the new one.
Managers who have spent a career recruiting, retaining and indeed catering to sales agents in the traditional agent- centric model now find themselves transitioning to consumer advocates and transaction managers in the old one. Even manager compensation formulas are transitioning from agent counts and sales volumes to profitability points and metric scores.
The chemistry of this transition is beginning to cause a significant level of angst between owners, executives and managers. In all too many cases the inability to resolve these matters forces managers back to selling and listing while brokers search, often for long period of time and with great effort, for more contemporary replacements.
This search for would be managers who “get it” is in turn made more difficult by the fact that time has reduced the value of the existing company agent pool as a source of new manager candidates.
About 47 percent of the agent pool is a member of the “mature” (age 59 - 80) and “boomer” generations (age 43 - 59). Unfortunately these groups also include a disproportionate number of the “high producers” who aren't seen as manager candidates. Those remaining, generally, are so totally vested in the traditional brokerage business and relationship models that the probability of their success becomes probable only after a extensive rehabilitation and reprogramming effort.
That leaves the 43 percent of current company sales associates in the “millennium” (age 18 - 26), and X’er (age 27 - 42) generations. This group for a number of reasons has decided that there are few benefits and many downsides in being a manager and thus is not a fruitful hunting ground.
The option of bringing in managers from outside the industry is becoming more and more common and a very interesting training and indoctrination system is emerging to bring these new managers up to speed.
Broker owners and executives are going through many of the same evaluations that are causing the current real estate consumer to question the traditional value propositions. Often the first step of the process is to list out or inventory the skill sets which the traditional managers brings to the table. Once this listing is completed each item is reviewed not against the traditional “agent centric” value system but rather against the emerging “consumer/profit” centric value system. It quickly become obvious that much of the traditional manager skill set is simply not relevant to where the firm is trying to go.
A second “skill set” listing is now created to reflect those competencies that the “new age” manager will have to possess. Required expertise in matters of generational dynamics, cultural diversity, consumer experience, customer relationship management, best practices, objectives design, benchmarking, transaction management, and market performance analysis and response all draw the broker owner or executive to the same conclusion. The emerging role of the office manager will be massively different from that of the old and it may be easier to teach an outsider what they need to know about the real estate business than it will be to teach insiders the new brokerage business model.
For the most part traditional managers received little or no formal education or training prior to assuming their management role. Moreover most firms had few if any, “enforced policies or standards” with respect to office and agent activities. In summary, the traditional manager brought an instinctual style to the table. Actual management actions were taken against this instinct. Often these specific actions were intended to quell an immediate crisis rather than to drive specific business and economic objectives.
One of the most dramatic features of the new business model is that it will be managed through the application and analysis of operational metrics and benchmarking data. Managers will have access to very specific data regarding company financial requirements, company, office and agent performance objectives, current business plan goals, overall market performance data, company wide performance data, and individual agent performance data. Software programs will provide (1) a complete picture of current office performance against objectives as well as (2) an analysis of what must be done to remedy and shortfall based upon previously agreed upon marketing and operational activities.
In short the new brokerage business model will be managed based on what is happening rather than what managers think is happening or hope is happening. The programs that provide these tools are available, feasible and affordable today.
Traditional managers who wish to join the transition need merely learn the new software and acquire the emerging competencies. Managerial candidates from the outside can lead with their grasp of the emerging competencies while relying on the metrics and benchmarking data to alert them to what is happening on the ground level. Broker owners and executives will benefit from a world in which deviations from objectives and goals are reported in almost real time. Most importantly, brokerage ownership will become a profitable and predictable investment.
