THE STATE OF IN­DUS­TRY LEAD­ER­SHIP

Kylie Davis and Tanja M Jones

Elite Agent - - CONTENTS -

AT A TIME WHEN PROP­ERTY prices are at record lev­els and home own­er­ship val­ues are fol­lowed as closely as foot­ball scores, CoreLogic in col­lab­o­ra­tion with TMJ Coach­ing set out to gain a deeper un­der­stand­ing of whether real es­tate agen­cies were sim­ply rid­ing the wave of growth, or em­brac­ing the real change needed to make their busi­nesses stronger for leaner times and dis­in­ter­me­di­ated mar­kets. The re­sult­ing data shows that there is plenty of work to do.

REAL ES­TATE has typ­i­cally been a self-made in­dus­try, with low fi­nan­cial and ed­u­ca­tional bar­ri­ers to en­try and dom­i­nated by big, street-smart per­son­al­i­ties who have pulled them­selves up by their boot­straps to make them­selves suc­cess­ful. But re­search shows a new breed of busi­ness-ed­u­cated and man­age­ri­ally savvy real es­tate agents are start­ing to make their mark. Th­ese new agents run tighter ships that are more prof­itable, have bet­ter em­ployee en­gage­ment and are more trans­par­ent around process and client man­age­ment.

The re­search iden­ti­fied: • Two-thirds (66%) of real es­tate agents iden­tify the qual­ity of lead­er­ship within their or­gan­i­sa­tion as good (45%) or ex­cel­lent (21%) com­pared with 12 per cent who say it is poor or non-ex­is­tent. • Nearly 40 per cent of all those sur­veyed – and 31 per cent of prin­ci­pals – have re­ceived no for­mal busi­ness train­ing at all. • In fact, 82 per cent of prin­ci­pals feel qual­i­fied to lead their busi­ness but are keen to learn more, while five per cent feel com­pletely un­qual­i­fied. • The higher the ed­u­ca­tion lev­els, the greater the like­li­hood of fi­nan­cial suc­cess – 47 per cent of busi­nesses ex­pe­ri­enc­ing neg­a­tive growth and 44 per cent of those ex­pe­ri­enc­ing flat growth had no for­mal busi­ness train­ing. • Co­er­cive lead­er­ship styles are the least likely to achieve re­sults – 17 per cent of those sur­veyed whose busi­nesses were ex­pe­ri­enc­ing neg­a­tive growth de­scribed their boss as ‘just do as I say’, com­pared with just six per cent of those who were ex­pe­ri­enc­ing growth above 10 per cent.

• The lead­er­ship style (see def­i­ni­tions below) used by the most fi­nan­cially suc­cess­ful agents is Af­fil­ia­tive, with 29 per cent of agen­cies ex­pe­ri­enc­ing growth higher than 10 per cent iden­ti­fy­ing this style, fol­lowed by 22 per cent Coach­ing. • The re­search shows that de­spite record prop­erty prices across most states, 29 per cent of those sur­veyed were ex­pe­ri­enc­ing flat or neg­a­tive growth in their busi­nesses, while 43 per cent were ex­pe­ri­enc­ing growth of up to 10 per cent and 28 per cent were ex­pe­ri­enc­ing growth of 10 per cent or higher.

IN­DUS­TRY SNAP­SHOT

The Real eS­tate of Lead­er­ship Re­port can­vassed the in­sights from 508 real es­tate agents in an on­line sur­vey run from Jan­uary to April this year. Of those who par­tic­i­pated in the sur­vey, 27 per cent were prin­ci­pals, 49 per cent sales agents, six per cent prop­erty man­agers and 18 per cent worked in man­age­ment roles with fran­chise or bou­tique groups.

Most (46%) had worked in the in­dus­try for more than 10 years, while 19 per cent had five to 10 years’ ex­pe­ri­ence and 35 per cent had less than five years’ ex­pe­ri­ence. Most (48%) worked within agen­cies be­long­ing to a ma­jor fran­chise (de­fined as more than 30 of­fices) while 22 per cent worked in bou­tique agen­cies, 24 per cent were in­de­pen­dents and seven per cent worked within cor­po­rate of­fices.

The sur­vey also shows an in­dus­try dom­i­nated by the over-40s with 31 per cent aged over 50, 27 per cent aged 40-50 and 25 per cent aged 30-40. Just 17 per cent of re­spon­dents were un­der 30.

The sur­vey found that 39 per cent con­fessed to hav­ing no for­mal busi­ness train­ing what­so­ever, while a fur­ther 39 per cent had un­der­gone short cour­ses in busi­ness and 16 per cent had com­pleted a univer­sity de­gree. A fur­ther six per cent had un­der­gone post­grad­u­ate train­ing in the form of an MBA (Master of Busi­ness Ad­min­is­tra­tion).

It fur­ther found an ‘Af­fil­ia­tive’ style of lead­er­ship – where em­pha­sis is put on team mem­bers to build morale and make them feel good about work­ing to­gether as a team – is the style of lead­er­ship most favoured in real es­tate, with 23 per cent of re­spon­dents iden­ti­fy­ing the be­hav­iour of their boss (or them­selves if they were the boss) in this way. This was closely fol­lowed by an ‘Au­thor­i­ta­tive’ style (21%) where the leader sets goals, but lets team mem­bers de­cide how they are go­ing to get there and be self-di­rected.

“My prin­ci­pal is quite ag­ile and re­spon­sive to the mar­ket. He opens the ta­ble for dis­cus­sion and is will­ing to im­prove,” wrote one re­spon­dent.

PRIN­CI­PALS VER­SUS SALES AGENTS

The re­search shows that a typ­i­cal prin­ci­pal of a real es­tate agency to­day is likely to have un­der­gone some kind of for­mal busi­ness train­ing, with 45 per cent stat­ing they had un­der­taken short cour­ses in busi­ness (other than their real es­tate li­cence train­ing), 16 per cent hav­ing a univer­sity de­gree and eight per cent hav­ing an MBA. It found close to a third – 31 per cent – had no for­mal train­ing at all.

This is in com­par­i­son to 44 per cent of sales agents who claim to have had no for­mal train­ing at all, 36 per cent who have un­der­gone short cour­ses in busi­ness, 14 per

“My boss likes to think he is Af­fil­ia­tive, but in fact he ex­pects peo­ple to do as they are told,” wrote one re­spon­dent.

cent who have a univer­sity de­gree and eight per cent who have an MBA.

The great­est pro­por­tion of prin­ci­pals were aged over 50 (47%) with 29 per cent aged 40-50 and 24 per cent younger than 40. This com­pares with sales agents who are fairly evenly spread across the age groups.

Prin­ci­pals were con­sis­tently more likely to have com­pleted train­ing on top­ics such as man­ag­ing peo­ple (61%), deal­ing with con­flict (55%) and un­der­stand­ing per­sonal strengths and weak­nesses (53%). This com­pares with just 42 per cent of agents who had un­der­gone man­ag­ing peo­ple train­ing, 44 per cent who were trained in deal­ing with con­flict and 44 per cent who un­der­stood per­sonal strengths and weak­nesses.

Prin­ci­pals are most likely to de­scribe their own lead­er­ship style as Af­fil­ia­tive (32%) where em­pha­sis is put on build­ing morale within the team by mak­ing them feel good about work­ing to­gether. This was fol­lowed by 27 per cent who said their style was Coach­ing, where the leader loves to help oth­ers im­prove their habits. Not a sin­gle prin­ci­pal iden­ti­fied their lead­er­ship style as Co­er­cive, based on ‘do as I say’ and or­ders.

In­ter­est­ingly, this self-as­sess­ment was not backed up by sales agents, with only 16 per cent de­scrib­ing their bosses as Af­fil­ia­tive, and 11 per cent iden­ti­fy­ing their lead­ers as Coach­ing.

In the eyes of the fol­low­ers within real es­tate, how­ever, the most dom­i­nant lead­er­ship style is Au­thor­i­ta­tive (25%) which is a goal-led style with team mem­bers be­ing self-di­rected and need­ing to de­cide how they will achieve their goals. This was fol­lowed by 16 per cent who iden­ti­fied their boss as Af­fil­ia­tive and a telling 14 per cent who said their boss was Co­er­cive.

“My boss likes to think he is Af­fil­ia­tive, but in fact he ex­pects peo­ple to do as they are told,” wrote one re­spon­dent.

“We are abused if we are not in the of­fice enough, and then we are railed against if we don’t get six ap­praisals a week by a boss who him­self has a team of three and yet rarely does more than three a week,” wrote an­other who cap­tured the theme of con­sis­tency. “I don’t mind be­ing told what to do – as long as it’s con­sis­tent and the rules are equal across the board.”

ED­U­CA­TION VER­SUS SUC­CESS

One of the key find­ings of the sur­vey was the im­por­tance of for­mal busi­ness train­ing in the suc­cess of a real es­tate agency. The sur­vey found that none of the busi­nesses where agents had un­der­taken an MBA or univer­sity de­gree had ex­pe­ri­enced neg­a­tive growth, while 48 per cent of those with neg­a­tive growth had had no for­mal train­ing.

The sur­vey showed a co­er­cive lead­er­ship style was least likely to achieve re­sults; 17 per cent of those sur­veyed whose busi­nesses were ex­pe­ri­enc­ing neg­a­tive growth de­scribed their boss as ‘just do as I say’ com­pared with just six per cent of those who were ex­pe­ri­enc­ing growth above 10 per cent.

Agents who have MBAs or univer­sity de­grees are more likely than those with no for­mal train­ing to have more struc­tured staffing man­age­ment sys­tems.

The sur­vey found that ter­tiary-trained agents were sig­nif­i­cantly more likely to have cre­ated ‘safe spa­ces’ and tol­er­ate mak­ing mis­takes (54 per cent of MBAs com­pared to 25 per cent of those with no for­mal train­ing) and were more likely to in­vest in reg­u­lar train­ing by in­dus­try ex­perts (50 per cent of MBAs com­pared to 41 per cent with no for­mal train­ing) or send staff to con­fer­ences (43 per cent MBAs com­pared to 38 per cent no for­mal train­ing). MBA and univer­sity-trained agents were also more likely to hold weekly one-on-ones with their staff (29 per cent com­pared to 16 per cent) – although this ac­tiv­ity was con­ducted by less than a third of the in­dus­try across the board.

“I think some lead­ers are ex­cel­lent and oth­ers need work - but this comes with time and ex­pe­ri­ence,” wrote an­other. “The big­gest is­sue is when a leader tells you to do some­thing af­ter hear­ing about it in a sem­i­nar, but when it is put into a real-life sit­u­a­tion you are ad­mon­ished for it by your peers or more ex­pe­ri­enced agents. You also see the suc­cess­ful sales agents who do their own thing and are not pulled into line but are called out by the same man­age­ment for be­ing suc­cess­ful – so there is a clash of cul­tures and mixed

mes­sages about how suc­cess be­haves.”

The re­search shows real es­tate agents are a self-mo­ti­vated bunch when it comes to train­ing, with 32 per cent of those sur­veyed say­ing they had paid for all their own train­ing and a fur­ther 22 per cent stat­ing they sup­ple­mented the train­ing paid for by their com­pany with their own funds.

LEAD­ER­SHIP SKILLS AND HOW THEY ARE DEMON­STRATED

The sur­vey showed that across the board lead­er­ship skills were rated as good with the skills of vi­sion and strat­egy for the busi­ness (25%) and em­pa­thy and mak­ing time for peo­ple (27%), two of the top skills most likely to be rated as ex­cel­lent.

The skill most likely to be av­er­age was ad­min­is­tra­tion and man­age­ment, while work/ life bal­ance was the skill most likely to be av­er­age (31%) or poor/non ex­is­tent (19%).

Team build­ing was an­other skill that ranked poorly, with 19 per cent claim­ing it was poor or non-ex­is­tent in their busi­ness and a fur­ther 25 per cent say­ing it was av­er­age.

Per­for­mance is mea­sured mainly through shar­ing re­sults in weekly meet­ings (63 per cent of re­spon­dents) while the good old of­fice white­board (61%) is also a vi­tal man­age­ment tool.

In­ter­est­ingly, only 34 per cent said they cur­rently mea­sured list­ing con­ver­sion rates and 38 per cent said they mea­sured prospect­ing ac­tiv­ity to see what got the best re­sults. A fur­ther 34 per cent iden­ti­fied that they needed to mea­sure and man­age per­for­mance bet­ter, while 13 per cent stated they were too busy get­ting through each day to mea­sure prop­erly.

“Bal­ance sheet and profit and loss are ba­si­cally the only mea­sure­ments in our busi­ness. There is never a dis­cus­sion about why are the num­bers good or why are the num­bers bad – it’s just sim­ply are the num­bers good?” wrote one re­spon­dent.

WHAT NEEDS TO BE DONE BET­TER

The sur­vey iden­ti­fied that a sig­nif­i­cant pro­por­tion of real es­tate agents are cry­ing out for bet­ter qual­ity lead­er­ship within their or­gan­i­sa­tions, and help in stay­ing mo­ti­vated and pos­i­tive.

While 61 per cent of re­spon­dents iden­ti­fied that per­son­ally stay­ing pos­i­tive in chang­ing times was the most im­por­tant chal­lenge their busi­ness faced at the mo­ment, few busi­nesses know how to achieve this.

The sur­vey shows that while 63 per cent of of­fices held weekly team meet­ings, their mo­ti­va­tional ef­fec­tive­ness dropped off, with 55 per cent of re­spon­dents claim­ing that they were used to in­spire them to greater per­for­mance. More than a third of re­spon­dents said fun and en­gag­ing so­cial ac­tiv­i­ties (37%), re­ward and recog­ni­tion pro­grams (31%) and team in­cen­tives (26%) were used to keep staff in­spired.

“The re­ward and recog­ni­tion from my peers and boss are en­cour­ag­ing,” wrote one re­spon­dent. “You spend a lot of time at work and have to en­joy what you are do­ing – and I do – plus it helps if it pays the bills too!”

But, some­what alarm­ingly, 40 per cent said more def­i­nitely needed to be done, while 12 per cent of re­spon­dents said they were not en­cour­aged at all, iden­ti­fy­ing that the lead­er­ship chal­lenge for real es­tate is yet to be con­quered.

“There is never a dis­cus­sion about why are the num­bers good or why are the num­bers bad – it’s just sim­ply ‘are the num­bers good?’” wrote one re­spon­dent.

Tanja M Jones

Kylie Davis

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