It is perhaps unfortunate that our industry doesn’t know as much as it should know about the immediate and near-term future of its business. A significant part of this can be traced to the fact that, by and large, significant sectors within the industry have decided not to be proactive, but rather responsive with respect to changing times. Accordingly, the master plan of our tomorrow lies in the hands of individuals and entities that are external to our traditional culture. We are witnessing the ramifications of this phenomenon every day.
However, even from this limiting perspective, we are being informed regarding the wide range of trends, directions and factors that will shape the residential real estate industry moving forward. By way of example, we know that virtually every other industry in America has either been forced into or elected to adopt standards, accountability and transparency and further that the initial focus of these factors has and will continue to be consumer satisfaction. This we know.
We should have a fairly good idea from our growing interaction with industry infrastructure and Wall Street investors that the importance of profitability and return on investment will dramatically increase. Finally, based upon the current activities of the Consumer Financial Protection Bureau (CRPB) regarding e-closings, we should consider knowing that this factor will converge with consumer demands and technological forces to require us to automate our transaction processes. These matters we really should consider declaring that we know.
Putting all of these trends, factors and forces together, there are a number of other conclusions that we can adopt without too much risk. Again, by way of example, and solely for the purposes of this article, we certainly can know that over the next 24 months in order to meet the challenges of these trends, directions and forces we will have to make several significant shifts in the configuration of our brokerage management teams. These shifts will require that (1) brokerages significantly increase and enhance skill sets and competencies in areas of traditional focus, such as automation technologies, customer services, profitability accounting, impact marketing and communications. Moreover, (2) brokerages will need to identify what new competencies and skill sets they will want to add to their existing arsenals assuming they wish to prevail rather than merely survive what promises to be an extended series of competitions and threats poised and initiated by these outside forces.
Readers who require additional evidence of the validity of these observations need merely review the activities of the residential listing portal, as they have moved across the space and market segments traditionally held by the real estate brokerage. Here again, some industry leaders are not choosing competiveness but rather isolation as the preferred response to these forces and, accordingly, are even now beginning to more fully appreciate the ramifications of such an election.
All of this takes us to the next waypoint of the steadily evolving journey of the real estate brokerage. Given the level of change and transition already experienced by the industry, plus that which is even now on the drawing board and scheduled to arrive during the next 12 months, it is clear that in the not-so-distant future, the brokerage community is going want to integrate a number of new skill sets and competencies into its management resources regardless of whether it choses to join the new forces or continue to deny them.
Perhaps the most important of these new competencies will be the ability to identify, recruit and integrate new talent into the traditional organization. Claudio Fernandez-Araoz has conducted research that lead to the publishing of a book entitled “It’s Not the How or the What But the Who.” This book is a good read and offers some valuable insights into this process and your author has liberally accessed that source in writing this article.
The core findings of Fernandez-Araoz’s research are interesting and right on point to the challenge being faced by today’s real estate broker. Since the 1990s, American employers have focused on competencies in both recruiting and retaining executive talent. As a result, most positions have evolved into skill set centered silos filled by subsequent candidates who lay claim to those specific competencies and experiences.
Where this practice lost traction is in the fact that in today’s incredible dynamic and changing business environment these basic competencies have become all but irrelevant to the evolved function and responsibilities of the same positions. The old round hole that was filled by the old round peg has assumed a new shape that requires a different kind of individual to fill it.
Accordingly, recruiters and employers in this new marketplace must now focus on individual potential rather than traditional experience. The fact that a candidate had the ability to assimilate into a traditional competency offers little evidence that they will be able to meet the ever-changing environment that will define the same position moving forward.
Fernandez-Araoz suggests that today’s job candidate must be assessed on the basis of five key factors.
- Is the candidate properly motivated to meet these challenges?
- Is the candidate a life-long leaner and naturally curious?
- Does the candidate possess insight?
- Is the candidate naturally engaging?
- Is the candidate a person of sufficient determination?
A candidate who has these requisite qualities is still not over the hill. Such an ideal candidate can only succeed and fulfill the brokerage’s needs if the position is engineered in a manner that will provide the winning candidate with the ability to meet the challenges and the motivation to keep growing and learning. These last two requirements can be a challenge for brokerages that find themselves unable or unwilling to grow and meet the challenges of change themselves. It is not unusual for successful candidates to find themselves trapped in an organization that is really not committed to change but rather one that is focused on perpetuating its history and heritage.
The real estate industry itself and a growing number of its brokerages have become bastions of opportunity and potential. Each day new options present themselves.The residential real estate industry will be an exciting adventure moving forward. Get on the bus and take the ride.