Strategic?

Enjoyed an excellent presentation on strategic planning today--a good time of the year to take stock and all that. 

Although I've been to several strategic planning sessions, was able to watch state association SPF committee one year as assistant regional chair and conducted a couple sessions myself, I am not a strategic planning enthusiast. 

Bottom line, I'm a chaos fan. We're all moving toward chaos--a state of greater and greater entropy every moment of every day. The organizers are just creating a temporary refuge that is comforting to them, but ultimately futile. It's really just a matter of whether you embrace the inevitable or struggle for control over a tiny slice of reality that will slip from your grasp when you least expect it. 

I enjoyed the recent presentation because I had an hour to review in my own mind why I don't like lists and planning--the way they are generally done. Now, I'm not saying planning is bad, but there are risks and pitfalls the avid planning folks don't generally tell you about. 

What brings me the most pleasure in life is to find a pristine intellectual beach on which there are NO OTHER FOOTPRINTS. How do you find that beach using a task list and time blocks? Without realization, planning can lead us into a very productive rut (and a rut is merely a grave of elongated shape). 

Making plans and lists creates a virtual world. It is tempting to assume that when something is checked off your list there is a one to one correspondence with events in the real world. Not always the case. The world that existed when the plan was drawn and the list was made no longer exists. Strategic plans tend to be either forgotten, or treated like an end in themselves, rather than a means to an end. That end my not have the merit it had when it was created. The end may not exist at all in the present environment.

Now with diligent checking, measurement, attention to balance, evaluation of all the stakeholders, etc etc. a strat plan could potentially be a marvelous tool--but all those things almost never happen, whether the plan is being done by a high school student or a national government. The ripple effects on diverse stakeholders are seldom considered. Lists work best for the list maker, but all those within the ripple zone may have a different perspective. 

Turning to real estate for a moment, a prime focus of planning and strategy I must contend that much about the business is over planned and under thought. It is possible to become very wealthy in real estate by developing a great strat plan and implementing it. That cool, because the measure of success tends to be monetary, not a strong level of client satisfaction that lasts through time. I've worked with, supervised and observed a number of the local superstars. They're remembered for their production, not the quality of service or those special times when they created magic and art with skill and diligence. Some of the top producers savor those magical moments, but others consider them an obstacle in meeting their plan designed to close even more sides than last year. 

One of my frequent mantras when I ran offices was "your clients measure success one transaction at a time". The planning mavens usually don't measure that way. One transaction is an item on a list. The clients don't care about the strat plan or the number of listings or the gross closed commissions. They want to find the RIGHT HOUSE at a fair price and enjoy the purchase process during a smooth transaction. Production real estate involves hits and misses. The end of year success may meet the plan target, but what about the misses? Necessary by products? 

Another thing that turns me off about strat planning is science. I was (am) a scientist. I live to test hypotheses. Testing hypotheses is never done. There is no right answer--even if we happened upon a right answer by random chance, we wouldn't know it. Constantly testing hypotheses, creating new ones and testing them doesn't mix well with finishing items on a plan or checking off items on a list. You just don't say--following that string of hypotheses isn't on the list --- so I won't go there. 

Ok, one more thing, really! Sometimes things just drop into place--as though by magic. Other times progress hurts like trying to run though an Arizona dust storm. Planning devotees tend to muscle through the bad times to complete their daily schedule--at the expense of the product. It usually looks like a "muscle job". 

On a personal note, my attraction for chaos may stem from my OCPD tendencies. I can and have become swept up in an activity or assignment that was, for a time, all consuming. There were usually benefits for some stakeholders, i.e. a level of work was done that was way beyond the norm. Perhaps so far beyond that no one else could have accomplished the task in just that way (not that there weren't other ways). Other stakeholders suffered and, ultimately, I suffered.

Making lists and plans and targets invites that swept away experience as the focus drills down to the plan, excluding the real world merrily swirling out of control nearby. The whole thing is an exercise in stark contrasts. Obsessively pursuing specific tasks on one hand and gleefully embracing the chaotic terrain leading toward virgin beaches on the other. Beaches enchant me. 

Quick post re idea for energy efficiency

Woke at 4:40 this am with a blazing idea--that I may have had before, but this time, the time is right.

What if houses displayed symbols or letters when they had completed an energy audit and/or a retrofit.

Maybe a H for HERS II and a R for retrofit.

If there was a for sale sign on the house the buyer would KNOW that the house had information about energy use AND had been retrofitted to conform to the CAP program of that community.

It wouldn't be a point of sale thing as such. Just a way of letting neighbors and passers by know that house was using less energy and the owners where doing their bit to help meet AB 32 goals. A little peer pressure and with home for sale some added value, because everyone who saw the house would know what those letters meant--regardless of MLS or trade association aversions to transparency regarding energy use.

The trade association would hate the idea. They really want buyers to ignore energy use and FUTURE mandates when they make purchase decisions. I read a stat last week that home buyer today expect to be in their home for 15 years---imagine what the retrofit requirement will be in 15 years as the municipalities discover they are NOT going to meet the CAP standards. Buyers need to plan ahead NOW, but they don't have the information they need--thanks to the trade associations.

When does that green glow begin?

Housing stock accounts for 40% (SLO County's CAP cites 43% ) of energy use. It also can supply a significant amount of energy savings at a relatively modest cost--compared to some other ways to reduce green house gas emission (GHG). So how is that going? Not well at all.

The state and national trade organizations want their member agents at the center of every transaction and they apparently want to control how those agents perform in those transactions. They spend millions of dollars to develop and maintain that control, though forms, education, promotion and marketing their products, most of which include not very well hidden agendas.

So when we start looking around for reasons why agents don't seem to care much about green (energy green, not currency green), it's not hard to glance over at the trade organizations. What do you see? NO POINT OF SALE--EVER, NO HOW! There's talk of voluntary retrofits, incentives to retrofit (without any means to pay for the incentives). The mantra contends point of sale is a hardship on the Sellers, because they don't net as much money at close of escrow. Why don't they? Are we to believe that Sellers NEVER factor in point of sale costs when they negotiation the price and that the listing agent doesn't either? Could the cost of point of sale expenses be a total surprise? What about Seller's net sheets? The ones the state association creates.

In the end, the Buyer ends up paying for the house, the retrofit, the commission, title insurance, loan costs, etc. The retrofit provides a house with some benefits to the Buyer who paid for it. The trade organizations apparently feel the Buyer should be compelled to say "I want an unretrofitted house that's cheaper at purchase, but will cost more later on and ultimately harm the planet and the future fate of humanity". How many Buyers would forgo the retrofit to save a little on the price? If the retrofit is done by Seller, the Buyer rolls the cost into the financing at low interest rates. There may be rebates, incentive etc, if the Buyer pays for retrofit later--but there may not.

The argument that point of sale requirements unnecessarily delay time sensitive closing of escrow is hollow. I've had escrows in which $10,000+ of pest work was completed; a landslide removed access to a house--that was repaired during escrow; septic tank/leach field replacement completed; failed furnaces replaced, new roofs installed, the list goes on and on (27 years worth!). ALL those complications exceed most energy retrofits in complexity and expense. The time factor is a thin ruse.

A few days ago, the realization hit that point of sale must work a lot better than the trade organizations are willing to admit. Here's why.

Berkeley, and a several other towns, have had mandatory energy retrofits for some years now.
Surprisingly, property values didn't plummet, people still bought houses AND LOTS of energy was saved.

HERE'S MY POINT
Given the resources within the state trade organization, don't you think if there was any objective measure showing what an absolute failure Berkeley's RECO was and how much damage it had inflicted on real estate and the American way of life, they would have put up billboards and websites proclaiming the evidence? Hasn't happened.

So the big question is how will the state and national associations confront the last chapters of Planet Earth as a habitat for humans? Will they be part of a plan to extend the page count in those chapters or will they be an obstacle aimed at business as usual until the last page turns. So far they're headed in a do as little as possible as long as possible direction.

We have had point of sale in the past---water retrofits are common around here. They work--slowly, but they work. Are they a hardship? Ever heard a Seller say they'd sell, but couldn't or wouldn't pay for the retrofit? Ever heard a Buyer say they'd rather buy in a town without a point of sale provision because they'd rather waste water and pay for it?

We have non-mandated point of sale protocols, too. In areas with septic systems, inspection and certification is pretty much universal and the Seller almost always pays. Pest control used to be that way, but with distressed properties anything goes--usually nothing gets done until the buyer takes ownership.

So is the state trade association part of the solution or part of the problem when it comes to greening the housing stock and prolonging the life of planet earth as a human habitat? Both, but at present there's way more problem going on than solution.

The interesting thing is that the level of passion and energy exhibited by the trade organization faithful in opposing Point of Sale exceeds the level demonstrated in support of greening the housing stock several times over. Assuming that is the intent of the trade association, it raises some hard questions about priorities. Lots of chest pounding from the local state association faithful--all looking over their shoulders to make sure the state association elite are watching--future leadership points are being scored.

Business as usual is ranked more highly than making a positive change in the fate of the planet.
State leadership and staff decided to empower their followers to contest point of sale associated with implantation of AB 32 through CAPs while continuing to soft sell increased energy efficiency to such an extent that there's virtually no more awareness or enthusiasm among most agents than there was 5 years ago. How's that work for the planet and the public?

I've been working on a CAP energy efficiency plan--my second version, so fewer postings. Should post the plan by mid week.