Real Estate Challenges Series: The Bozo Explosion

By Amanda Creter and Alex Mont-Ros

     A few months ago, we met with a very successful real estate agent who was struggling with team members and getting them into production. Time and time again this real estate agent/team leader would hire on someone to find out a few weeks later they were not a good fit and momentum was always lost. As we examined the business from a transaction coordination and consultative perspective, we identified that the team leader was not hiring the type of agents that would help raise the bar on the overall team’s production and growth objectives, which builds momentum and attracts other talented individuals. This was one reason amongst many why their business began to struggle. Most of us never give a second thought as to why this happens to countless teams that are eager to be successful, but continue to be plagued with an unproductive team.

     Any number of factors could have influenced the trajectory of why a real estate team fails to meet their potential. One element that we see often influencing a real estate team’s success, or lack thereof, is the management teams' ability to hire the right talent. In previous Real Estate Challenges Series articles, we’ve discussed the importance of taking your time on hiring the right fit for your company and how it can influence the outcome of your company’s overall success. When it comes to hiring talent we have experienced our own trials as an organization, so we can empathize with those that are going through this today.

      The point we want to drive home is if you hire team members that don’t raise the overall benchmark or bar of the team/organization, you will end up with inept employees or independent contractors that will not add the appropriate value you were looking for. Steve Jobs labeled this the “bozo explosion”. Jobs believed that “A Players” should hire other “A Players”. We are in agreement on this and it needs to be a clear expectation that the leader sets as the standard for all new hires coming on board. When management hires anything less than an A Player, it increases the odds of business integrity degradation and lack of high performance. In return, it becomes a trickle effect where B, C, and D Players become the norm and sets the benchmark for the organization. These players will most likely produce the outcome of a failed organization.

     Notice the image below for two examples that keep the organization or team thriving and on the cutting edge, versus the example that don’t move the organization forward and creates roadblocks to true growth and success. On the right side, the CEO or Real Estate Team Lead and those under them (think of them as Executive Assistants, Transaction Coordinators, Buyers Agents, Listing Agents, Marketing Coordinators, Etc.), were A Players and the hiring process continued to meet the standard of hiring on A Players. This increases the odds of bringing out the best outcomes for the roles they were hired into. However on the left side, When that same CEO or Team Lead hired on a B Player, they also were more inclined to hire down and not challenging the status quo which created a ripple effect of more poor hires. Thus, as Steve Jobs would mention creating the “bozo explosion”.   

     Now, you may be looking at this image thinking your team or organization is different. You may have a small Real Estate team and only have one manager, with a handful of Agents under him/her. With a small team, you couldn’t possibly have a bozo explosion on your hands, Right? If you don't know, its time to take inventory of your team. If you already made the mistake of hiring  B, C, or D Players, take corrective action. By now, you already have an idea of those on the team that are not a good fit by the deterioration of the quality of work, decreased productivity, and possibly stunted company growth. Either provide them better training, repurpose them to a better fit within the organization that plays to their strengths, or cut ties with that employee or independent contractor. Keeping them around hoping they will improve within their current role only hurts the members of your team that are working hard and being productive...the A players.

     Another way to prevent the bozo effect is by diversifying your team. You need different perspectives to think outside the box and grow in ways you may not have seen on your own. Diversity within a company is healthy. You shouldn’t rule a candidate out because they don’t have the right resume. Plenty of candidates have the perfect resumes and still end up being B, C, D, or worse, F Players.

“Keeping them around hoping they will improve within their current role only hurts the members of your team that are working hard and being productive…the A players.”

     So how do you go about hiring A Players? It seems like a simple answer, hire someone smarter and better than yourself. It really is that simple on the surface and you shouldn’t be threatened by this. Many times we may not hire better and smarter because we feel they will out do us and eventually not see the value to stay for the long haul. Another excuse or fear may be that you become exposed of some insecurity as a leader. Nevertheless, don’t be afraid to hire smarter and better, it’s what your business needs, not a bunch of bozos you can tell what to do who add no sustainable value to the organization. A better practice is to interview someone with the thought in mind “would I want to work for you and can you do what I need done better than myself?” If the answer is yes, and they are qualified with a proven track record, you may have found your fit. 

     It is also worth noting, just because a person is smarter, doesn’t mean they will actually be a good fit within your company so don’t make the mistake of hiring just smart people. They could be extremely knowledgeable within one area of the business, but lack EQ and the expertise within your particular field. The worse is having someone who is a genius, but lacks work ethic needed to get the right things done. As Mark Zuckerburg mentioned and rings to be true, “Raw intellect is not the only measure of an effective person; the real trick is finding smart-working people who aren’t jerks that get stuff done.”

     As you are working to grow your real estate business and hiring on team members, keep in mind that you are not alone in this struggle, and let us tell you, the struggle is real. Focus on finding A Players that may be smarter and can do what you do better, or that can focus on doing the tasks better that you don’t find productive as a leader. With this type of focus, you just may reduce the risk of having a Bozo Explosion within your organization.

Please comment and share with us your thoughts below.

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Real Estate Challenges Series: Hire Slow, Fire Fast??

Contributors: Amanda Creter and Alex Mont-Ros  

     When you are growing your real estate business, there comes a point where you can no longer do it alone. You have more on your plate than you can handle, so naturally, you begin the hiring process. This is necessary and vital to your organization. However, you should be very careful during this phase, because it can easily hinder growth, instead of aid it. Who you hire, especially early on, is paramount to the construction of your team and the trajectory of your business.

     With most startups and specific to real estate, once you feel the pressure to bring someone on, you’ve waited too long. You feel like you “need someone NOW.” Flash hiring because you need the “bodies” can get you into a lot of trouble and set your company back. Former Apple Chief Evangelist Guy Kawasaki said "When you're in a rush to fill openings to respond to growth, you make mistakes. Unfortunately, many companies adopt the attitude of, 'hire any intelligent body, or we'll lose business--we'll sort everything out later.'' This method, though it may be effective in the interim, will not serve you well for the long haul.

     So what is the best approach when it comes to your real estate business and who you align yourself with? There’s a lot of controversy over the mantra “hire slow, fire fast”, but many successful business owners support this philosophy. I think what many people miss is that this hiring process isn’t advising you to take a long time to interview and bring on each new person, but it does recommend you perform your due diligence and not rush it.

     Instead of reviewing a resume and conducting 1-2 interviews before extending an employment offer, take a bit longer to get to know the person, and how well they will mesh with your team. If feasible, possibly extend an invitation to come in and work side by side with your team for a day. There are other plenty of great ways to perform this due diligence such as implementing Panel Interviews with a few trusted people, usually no more than 3, who can walk through situational & behavioral questions and role plays with the candidate. This process usually removes the hiring manager and allows their peers or trusted few to interview the candidate and give their unbiased opinion, allowing the collective group to rate as a whole the candidate. Keller Williams Realty also has a well built out structure called Recruit Select to help identify the right candidate for the job. Involving your team early on will help in the decision making process, and could save you from a catastrophic hiring mistake. But what do you do if you’ve already made the mistake?

     Most individuals are not trained on how to bring on new talent, or cut ties with someone who just isn’t working out. It’s a process learned over time, by trial and error. It’s okay if you have already made the mistake of hiring too quickly and now being faced with the dilemma of what to do next. If you already have the feeling a team member isn’t working out, it’s time to part ways. Keeping someone on staff that just isn’t working out hurts both your team and your business. A bad apple can slowly poison the rest of the batch. If you keep someone around who shouldn’t be there, your team will notice, and begin to question why. You may feel a sense of loyalty; maybe you hired a friend, or this is someone who has been there from the start. But waiting won’t resolve the issue, and it isn’t kind to keep someone around that is detrimental to everyone else.

     Firing fast when you realize the person isn’t a fit is crucial to your business. As the saying goes, “you are only as strong as your weakest link.” You are running a business, not a charity. You have clients, and possibly investors, to answer to. You cannot afford to keep someone around that isn’t working out. Firing someone is never easy, and never feels good. It requires being a leader and having hard conversations. When all is said and done, your business and your team will thank you for doing what was necessary for them to thrive. 

If you know of any other great ways for hiring the right talent and avoid making bad hiring decisions, please comment below and share. We would love to hear from you.


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References:

Kawasaki, G. (2006). How to prevent a bozo explosion. Retrieved from http://guykawasaki.com/how_to_prevent_/ 

Real Estate Challenges Series: Jack of All Trades, Master of None

By Alex Mont-Ros and Amanda Creter

     Typically, when a Real Estate Agent working towards building a team starts to expand because of growth in the business, we see challenges presented as they hire help to relieve some of the transactional and administrative pressures. The real estate agent or team lead should not want to operate as a jack of all trades, and master of none as they find their business growing, but refusing to delegate tasks and hire on new team members will stunt growth and keep this agent doing many roles within the business. Action needs to be taken to accomplish growth objectives so they can continue to focus on mastering what Real Estate Agents do well. The first position they hire for usually is an Administrative or Executive Assistant (EA). This individual serves as an all-in-one role for the Agent, handling not only the Administrative tasks of the business, but also taking on roles such as Marketing Coordinator, Transaction Coordinator, Listing Manager and anything else the Agent needs.

     For a Real Estate Agent or Team’s first hire, this “jack of all trades” role on the surface makes sense, and is seen as an asset to his/her team. At first, this is true. The Agent needs help around all aspects of their business and this Executive Assistant provides that help. What most Agents do not realize, is that having one person focus on so many different roles all at once can actually hurt the business more than help it. In the long run to keep the business growing and meeting the demands of the market, something will have to give or breakage in the business will occur.

     Hiring someone that can tackle any obstacle seems like the perfect addition to your business. But as the old adage goes “jack of all trades, master of none”, an agent who hires an EA to do all will quickly find their team structure become fractured and overworked. Though your Executive Assistant may be competent with many skills to perform many roles, you are preventing them from delivering quality service as the business begins to scale and the role becomes more time consuming. Not to mention, the cost and time of training someone in each role an EA operates from can quickly add up becoming a sunk cost to the business.  

     Having an EA split their focus and energy among so many different roles prevents them from harnessing and mastering any one skill. It limits them to how much they can grow in their role, and prevents them from specializing in any one thing. To be the best you can be and set yourself apart in a market saturated with competition, you need to offer your clients the best service possible. Having your EA not focusing on where they can add true value with laser focus on mastering their craft isn’t offering your clients the best, it’s offering them substandard services as the EA begins to be overworked, less productive, unhappy, and may end up potentially quitting, causing the business to suffer a massive blow that will be tough to recover from. We have seen this play out countless of times and the feedback provided from Executive Assistants who left very successful teams was that they were overworked and had too much to do with little clarity on what was truly priority for the agent or team.

Traditional Executive Assistant Workload

This is prior to bringing on a Transaction Coordinator

     This becomes especially true when an EA handles all the business operations, administrative, transaction coordination, and marketing; putting the business in serious risk and causing brand degradation when service levels drop. A Real Estate Agent will find themselves having to recruit, hire, and retrain someone to do it all over again when an EA decides to stop working for the Real Estate Agent. This is not a good use of time and can impact revenue negatively. 

     To help meet these challenges head on, Real Estate Agents or Teams will hire on a transaction coordinator first to take on the most time consuming tasks, which is managing the transaction from start to finish. Some teams may not have an EA, but they have learned how to delegate the marketing and administrative tasks well enough to get them by through outsourced service offerings. Even so, we recommend what is optimal and at a minimum; hire an Executive Assistant and a Transaction Coordinator until growth has reached a point where an EA will now need to delegate the marketing tasks to a Marketing Coordinator.

     If a team already has an EA, the second hire is typically a Transaction Coordinator. This is a critical hire, whether first or second to join the team. A TC will focus their energy solely on the most time consuming part of the business which is the coordination of transactions, as this entails all communication and monitoring of the deal(s) to see them to closure. When you have many deals all going on at once, the time needed multiplies to manage these transactions. This is one of the main reasons why the Transaction Coordinator needs to also be a master of this craft of transaction coordination, and not be a jack of all trades. A Transaction Coordinator will now be able to provide specialized care of the Real Estate Transaction(s) from start to finish. They will also provide the right attention needed to service your clients, giving your EA hours back each week to focus on other critical tasks to help the Real Estate Agent grow and scale their business.

Transaction Coordinator

100% Focus on Transaction Coordination-No other tasks

     By having Executive Assistants and Transaction Coordinators who are masters of their domain, Real Estate Agents increase their odds of delivering high quality services to ensure the best experience for their clients. Through this appropriate delegation and hiring of critical team members, it also helps the Real Estate Agent become a master of their craft, and not just a jack of all trades.

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