Time management

Trying to get over head cold. Haven't had classic like this in years. So far the only benefit has been very strange dreams. Two nights ago I had a dream about what's wrong with real estate brokerage business (not a surprise!).
Nothing totally new, but a more crystalline view of exactly where most of the practitioners left the path toward improved service to their principals and became focused on standardized methods and procedures.

I'll wait till the cold leaves to write that post, but for New Year's Eve let me leave you with some simple questions.

What proportion of agents' time is spent doing paperwork and computer research--ie standard forms, disclosures, MLS searches. etc. NOW, as compared to 25 years ago?

How much of that paperwork and computer research has a directly positive impact on the Buyers' likelihood of purchasing the RIGHT HOUSE and the Sellers' likelihood of finding the RIGHT BUYER?

If they understood this CURRENT time management scheme, how many Buyers and Sellers would approve?

New family member

The small local cell phone company I've been using for 14 years or so was purchased by AT&T recently. Received friendly letter that I had till end of year to convert. No real choice for Cayucos and Cambria coverage. The small local company got the prime cell tower sites years ago and regardless of any other benefits of a particular carrier, if you can't get a signal you're screwed.

Should have gone in a couple weeks ago, but was busy and didn't really want to decide on a phone--of course my smart phone wouldn't work with AT&T. After some online research and asking friends for their opinion, I decided to get anApple iPhone 4. Went to local AT&T factory store in SLO late afternoon--jammed with customers like myself, but a storm was on the way, so I stuck out the wait. Staff was busy, but pleasant and competent (always a plus!). After about 45 minutes my name was called and the process only took about 15 minutes. Thanks to my old phone keeping contacts on the sim chip, they all migrated into the iPhone--all 200+ of them. That was a big relief.

Still far down on the learning curve, but the amazingly clear display and the interface very quickly convinced me that this is a small computer that happens to make phone calls. I got the 32GB version. 16GB was out of stock and I sorta wanted the 32GB anyhow. I have 2 manuals on the way from Amazon--about 1000 pages as I remember. Less than 24 hours after going active I can call, voice mail. email, web browse and see how wall street did. About as much as I did on my old phone and the display makes it all so much more appealing. Voice quality is better, signal reception a little better and the weight is about same--Nokia E75 is no lightweight. The clearer signal is important to me--hearing voice inflection is critical to quality communication. Just understanding the words isn't enough.

Typing is a work in progress. The Nokia had the biggest slide out keyboard out there. Touch screen on the Apple is an adjustment. The keypad is huge though and dialing is easier. Have not experienced the "death grip" thing so far--maybe they finally did a firmware fix? I got tired of reading Google matches after the first 3 pages.

Yeah, the phone cost a bunch and AT&T is about 2.5 time as expensive as the old carrier, but I got a nice signal in Cayucos (4-5 bars), plus plenty of head room in the technology learning arena. This is my 5th or 6th cell phone--going back to 1996--remember analog days--those were fine signals. I had an NEC that weighed close to a pound and looked like a rechargeable telephone. We've come a long way! I sold real estate for 10+ years without cell phones--gee how did we do it? LOL!

Cell phones allowed agents to leave the office and the office culture that allowed them to soak up the nuances that make the real estate business all that it can be. Communication technology has advanced, but the quality of communication? Not so much!

mindset musings

Remember that I read Dan Pink's "Drive"? One of the books he recommends, is Mindset by Carol Dweck.
The concept of mindsets predisposing portions of the population toward certain behaviors struck a chord (or a nerve) where real estate is concerned, so I bought the book and started reading. About half way through and enjoying the insights into why agents are the way they are. I trained and managed agents for 18 years. Wish I'd had the book back then. I did some of the right stuff, but could have done better, particularly with some of the gifted agents starting out. 


Dweck's "Mindset" breaks the population into two groups. 1. fixed mindset and 2. growth (AKA learning) mindset. The fixed mindset people buy into the nature mode (as opposed to nurture)--you have intelligence and abilities that stay largely fixed throughout life. The Run What You Brung philosophy. Can't change how smart you are. If you believe that, you tend to be a little insecure about how smart you actually are--because it really matters--you're stuck. You look for opportunities to prove your "smarts". Activities that you're good at, bringing rewards (external motivational rewards) with the least possible effort. Effort doesn't make you smarter, so what's the point. It's a simple world and it sound a lot like real estate. 

The Growth/Learning mindset people believe that you can change your "intelligence" by practice and study and discovering new ways to do things. Effort brings more intellectual capacity (if not native intelligence) and so even if success is illusive, the effort may still be worthwhile immediately or down the road. The effort may even be FUN! 

The real estate industry is predominantly a fixed mindset business in which agents do repetitive activities and have an opportunity to make lots of money. It's all about PROVING that you're good (by making lots of money) over and over. Some people are great salespeople, some aren't. Many in management positions feel that you can't improve salespeople through training. That's why large firms are always recruiting. They hire many agents, then put them through some preliminary training and let most of them go. The training isn't for training, it's to weed out those not deemed winners. That fixed mindset is pervasive. It also inhibits the ability of the industry to provide increasingly better service in the best interests of the Buyer and Seller. The industry prefers to keep things simple rather than explore the host of ancillary intellectual realms that overlap with real estate decision making. To discourage discovery and exploration, the trade organizations standardize almost everything possible in a business that assists unique people in buying what are usually unique properties. MLS databases, standard forms, Codes of Ethics etc offer a secure environment for those who don't want to explore and discover. Real estate is the perfect habitat for the fixed mindset. 

I've observed some very smart and extraordinarily successful people in real estate who became visibly uncomfortable at the mere suggestion that there might be different, perhaps better ways to approach the business. These icons of the fixed mindset are driven to prove their "innate" skills over and over in an artificially simple world reduced to the bare basics, list, sell, collect commission check. Disrupting the security of repetitive "success" just because Buyers and Sellers might benefit through making wiser decisions has little appeal to those with a fixed mindset.   

  

Drive and real estate II

Dan Pink's book flows from the idea that there are 3 layers of motivation which he compares to operating systems. A primal motivational layer (Motivation 1) focused on survival. A somewhat more advanced and nuanced layer (Motivation 2) of more recent origin that embraces reward/punishment (AKA carrot and stick) motivation. A third layer (Motivation 3) is designed to accommodate the intrinsic motivational drive toward mastery of the known and exploration of the unknown-- regardless of the benefits and, to a certain extent, the costs.

Real estate is one of those antediluvian business processes still stuck in the Motivation 2 realm. It's largely driven by extrinsic rewards, ie commissions. The punishment phase arises from inadequate risk management or a broker not happy with the Gross Closed Commission figures. Carrot and stick in classic mode. Is there any hint of Motivation 3 present in real estate? Very little. Real estate runs on a very simple dinosaur brain, despite what your impression might be if you read an independent contractor agreement oh so carefully worded to imply that the agent has considerable latitude in creatively achieving the desired end. In the real world, the latitude may be there, but there aren't many explorers hiking down freshly blazed trails where no foot prints are visible ahead.

Why? Two main reasons. The measure of success in real estate is very simple---money. The business involves an incredible diversity of skills and knowledge, but the only manifestation of success is the commission check at the close of escrow. The spellbinding leaps of creativity that might have occurred on the way to close the escrow are never on the radar screen of success. All that matters to the industry is the sides and the money. Heaven forbid the escrow didn't close. If a wondrous new idea sprung forth during an ultimately failed escrow, it would very probably vanish forever by its association with a negative event. It's a superstition thing.

The other factor is the rampant standardization engineered by the state and national trade organizations to provide a one size fits all approach to business, politics and real estate life. The forms are standardized, the political views are standardized, the services provided to the public are largely standardized. The trade organizations set the standards of practice and to do business in any other way increases risk--or that's the impression conveyed. After creating this sweeping standardization the state association conveniently develops and sells products and services to assist their members as they engage in standardized activities.

There are 180,000+ captive (and largely standardized) consumers (AKA members) of state trade association products who are for the most part motivated (as in Motivation 2) by money, rather than an intrinsic urge to discover more effective ways to deliver service consistent with the best interests of their clients. If an agent did make such a discovery, fellow agents would casually ask "but does it increase money or decrease work?" Some Kool Aid Krowd agents would also ask, "isn't that discovery inconsistent with trade organization standardized recommendations".

This this pattern bad? Not necessarily. Like any "one size fits all" plan, it does fit a lot of the business pretty well, but it also discourages evolution of the standards to meet changing needs and also fails to accommodate any exceptional outliers that require a solution totally outside the box.

So here's the interesting part. Does the profession of real estate tend to attract and retain Motivation 2 type people, rather than Motivation 3 people? Alternatively, does the real estate profession change Motivation 3 people in ways that make them conform more closely to Motivation 2 behavior?

How might the real estate industry change into a more creative mode? Technology? Not likely because technology tends to provide the adopters with new ways of accomplishing old things. Technology seldom IS a new thing. Technology in the form of social networking, digital communications, information display etc hasn't really changed real estate basics, just offered new ways to address the basics. Those new ways are further and further from the real world and, as such, may not be in the best interests of the Buyers and Sellers. Of course if you ask the Buyers and Sellers, they'll say "sure I want more technology and I want it now!"    

home on the range

I finally got Internet at home! After decades of only doing online work at the office, I'm on cable broadband and can operate more efficiently. More business in SLO , but Cayucos is the other direction. I'll go to Cayucos most days, but not always first thing in the AM.

I'm already reading and writing more in the evenings. My remaining cat likes that--she has a nice bed on the dining table (which I never use to eat on) and offers purring encouragement and a pithy comments from time to time. When the time change occurred this year it just seemed WRONG to work at the office for 2+ hours after the sun went down. I run in the AM now, so there's no racing the sunset each day to break up the afternoon.

This schedule has produced real progress on the screenplay I started over a year ago. It sat idle for about 5 months, but is moving ahead every day now.

I finished Drive by Dan Pink a couple days ago. Digesting what the meaning of his simple messages might be to organized real estate. That's one of the problems. Real estate is organized, but for whom? Not the Buyers and Sellers. The underlying problem with standardization is that it suppresses evolution. The entity creating the standardization controls change, but that change isn't driven by market forces or the best interests of the Buyers and Sellers. It's driven by the same entities that created the standards in the first place. Those entities, like all organizational entities, have only ONE primary goal. To sustain their control, or better still, expand their control. There is no secondary goal.

That's what happens in Washington, Sacramento and the PTA. It's a flaw that humanity has yet to solve--the planet is the largest stage and we're not doing well with that either. The climate is headed in a very bad direction, but the world's various organizations must have their power tipping opportunities on the way to an ineffectual attempt to extend the planet's ability to sustain human life. It's like being an observer in a leaky row boat equipped with a bucket for bailing, but sinking slowly into the still dark waters as the other occupants tenaciously discuss the political implications of the bailing process.

Drive (the book) and real estate (the business?)

Started reading Drive by Dan Pink a few days ago--going slowly with the busy holiday season--about 130 pages in so far. I mentioned in an earlier post that real estate has always been a little hard to understand--despite the fact I've been doing it for 25+ years. More recently, I've had trouble understanding the wikinomics phenomenon whereby people extend significant amounts of effort and talent to accomplish tasks for no compensation ---other than the satisfaction of purpose and enhanced mastery.

And along came Drive to explain both gaps in understanding.

You'd think I wouldn't have a hard time with either. I've never been a very skillful technician of the age old real estate algorithms that, when repeated over and over, produce celebrity agents and huge annual statistics. I've managed several agents who were skilled in that respect. I like to think I added a dimension to their success, but I'm a creative sort and after spending 20 years as a scientist focused on finding new species in unexplored habitats, doing the same thing over and over had little appeal --- even if it did come with extrinsic motivation and reward.

On the wiki side of things, I've done many thousands of hours of volunteer work for real estate and environmental organizations-certainly enough to fund a nice pension plan-- if I'd been paid minimum wage, much less what I was arguably worth. Why? The experiences were interesting (mostly--leave out the petty backstabbing) and added facets to what has become a very unusual life. When I get time to write books, the background information will be almost limitless. I also discovered that I'm pretty good at some things I would have never imagined. Oh, and I met some intriguing people along the way.

The book Drive addresses MOTIVATION--subtitle being "The Surprising Truth About What Motivates Us". That surprising truth is that extrinsic motivation--long the bastion of business enterprise, may not work all that well over the long haul. Carrot and stick are simple to understand and relatively easy to implement, but the ultimate effects may not be beneficial to a majority of the stakeholders. We're certainly in the middle of a very sluggish economic recovery (I'm being optimistic there). Extrinsic motivation, as in pay, bonuses, aggressive pursuit of greater and greater short term rewards, played a starring role.

Extrinsic rewards are the primary, if not the sole, basis for motivation in real estate. I've never heard an agent say they choose real estate because they felt a burning need to discover an innovative, just plain better, approach to providing outstanding service to the public. Service that was in the best interests of the public--not necessarily limited to what the public wanted. It's a performance based profession--only the performance is measured by a very special yardstick--close escrow and you get paid. What you did along the way, or afterwards hardly matters to that yardstick. Cross the magic escrow threshold X number of times and you get paid X number of times. Nice symmetry! You measure your year by commission volume. What about the public? What about the quality of service? What about the type of experience the principals had during the process. Oh! You mean the way the public measures success should have some considerable nexus with the way the brokers measure success? That sounds complicated!

The real estate environment is further complicated because individuals only use the services of a broker every few years--if that often. The Public never gets far along the learning curve measuring skill levels among brokers. They seldom experience the efforts of more than a handful of brokers in their lifetime. Most of those brokers are trudging along the old--please get me across the threshold to the commission check so I can work on other deals--business plan, so what's to choose from? When I was managing offices, one of the kernels of wisdom I repeated from time to time was this: Buyers and Sellers measure the quality of the service they receive ONE TRANSACTION AT A TIME. Do they care if a broker had 20 sides or 5 in the previous 12 months? Obviously many principals would assume that the more productive broker had better skills because of his or her higher production. No one has ever had the courage to test that hypothesis--and probably never will. It's way easier to tally commissions.

Do members of the Public ever say--"I want you to sell my house to the RIGHT BUYER (see earlier posts for definition) and I want you to use techniques to find the RIGHT BUYER that no one has ever used before--better techniques. I want you to create and innovate and discover . What would that cost? Hard to say, because it's a least common denominator world out there in real estate land. There no extrinsic reward for innovation and mastery and those with intrinsic motivational preferences usually gravitate to more fertile fields. Commissions are based on sales price, not new ideas. Work those algorithms hard and become rich and celebrified.

The trade organizations like it that way and the major brokers do too and they demonstrate that by standardizing nearly everything they can. Standard forms, office procedure manuals, franchise agreements, training classes--all aimed at delivering a certain one size fits all level of performance. Much of that is focused on risk management, not on delivering better and better service in areas that benefit the Buyers and Sellers by improving their real estate decisions.

Much like the book The Three Laws of Performance I read a few weeks ago, Drive holds up examples of enlightenment arising from a very few concerned corporate leaders willing to cooperate and compromise to improve things for a broad swath of the stakeholders (as in consumers, workers, executives, stockholders, etc). Nice, but if you polled all the stakeholders in all the companies (and they were candid), you'd find some really don't want to change, even if those changes would better the situation for the majority of the stakeholders. Majority doesn't always rule in the real world.

The evolution of nearly anything depends on variation. If there's little variation, there's little evolution and little progress toward an improvement in circumstances. That works well for those with power and position--they stay in place in a comfy habitat.

More from Drive as it applies to the wonderful world of real estate in future posts.

Closing of the year-prelude

Ok, so I a borrowed the title of a favorite Christmas song (from the movie TOYS)--but it is the closing of the year. Don't worry, I'm not going to go though the WHOLE year in one post.

This year has been remarkable in many ways--but so are they all. This one is extra special because it raises the very difficult question of whether WE (as in humans), as individuals, groups, organizations, cults, political parties and even the entire human species can learn from history. One would think that is possible, given our high opinion of ourselves as a species), but if you study history carefully--not the high school textbook sanitized stuff, but the real deal, there is doubt that learning from past events is often accomplished by humans. Oh, we get through a couple decades of schooling and pass drivers tests, that sort of thing. Oh, and some of us are really good at learning new tech gadgets (not necessarily what they're good for). When we get to--"that didn't work very well and I should try something different--maybe radically different" we kinda freeze up and glance at the comfort of our old path, then realize that accountability in our current world is about a mile wide and an inch deep--you ain't gonna drown, even if you are found out to be wandering down the wrong path yet again! The other worrisome thing is the number of BOOKS written on how to learn from history and CHANGE! There are thousands--and like cold remedies--if there was one that worked, there would not be thousands.

As a species, and all the way down to individuals, we seem to find ourselves in the Oliver and Hardy world of "This is a fine mess we got ourselves into" deja vu syndrome. How come? Two main reasons: comfort and accountability (or lack of same).

The plan for this blog is to look at some major policy and strategic agendas that were front and center in real estate for a portion of 2010. Then figure out what happened (not always easy--transparency is right up there with accountability as a word that means something in dictionaries, but not so much in the real world) and what should have happened instead. If there's still courage left (yours and mine), I'll ponder whether comfort and a lack of accountability may well leave us on the same questionable paths in 2011. That leaves us at one of my favorite quotes--the difference between a rut and a grave is the configuration of the hole (the original said shape of the hole, but that's not quite right--they are both sorta rectangular--OK that's my OCD kicking in).

As for accountability, I now feel obligated to explain the paucity of posts, because I promised a plethora. Been sick with sinus and middle ear problems, plus I was writing other stuff during periods of relative lucidity the past week. In addition, lack of open houses has cut into my reading time (that is changing this week), but I'm started on a new book (Drive) that will generate a rich assortment of posts. It explains some misgivings I've had about the real estate industry and wikinomics for the past few years. Any one book that can do that has got to good.