The Industry in 2017 – What Will It Look Like?

I am often asked what I think the industry will look like in 10 years, so thought I’d share my thoughts -

1. Groups will get stronger- the dynamics of our clients will continue to change, with increasing expectations of service, knowledge and information meaning we will have to be better at what we do and what we provide. To do this, we will need better resources, better technology, better training and a range of other support that only the strong groups will be able to provide. The independents who often rely on strong personalities for success will in the main struggle to compete. The average size of real estate offices will also increase again to increase the ability of them to deliver what the client no longer expects, but demands. 
2. Strong, Professional and Modern Brands will become more important – as new generations X and Y continue to grow in numbers as both clients and members of our industry, the growing difficulty in attracting and retaining them will see the recognised brands, with their associated environments, career opportunities and reasorces become far more attractive for both X and Y clients and recruits. 
3. The Service Offer will broaden – I believe we will need to be more than just real estate agents, we will need to have become Transaction Managers. Our clients will increasingly look for assistance with finance, insurance, moving services, conveyancing and so on. They will want a professional that can take the complexity and stress out of the entire process – help make it easier.
4. Fees will Increase for some – Fall for others - with higher expectations of both the quality and range of service provided, those that are more qualified and offer a wider range of services will both retain but also increase their fee income. Those smaller operations that can’t compete on service or resources will compete on fees, offer lower fees to get the business. This will become increasingly harder as in the main, our clients, especially X and Y are more focussed on value than cost.
5. Technology will be huge - a familiar story, and one I wont go into deeply, I think we all understand the significance of technology. 20 photos on websites became virtual tours which will lead, and is already, to videos and then it will be 3D virtual open homes where as with Second Life, we use a virtual world to view actual properties, never leaving the office and meeting our clients in cyber space – and that’s only one change coming!
6. Average Age will change dramatically - currently the average age of a real estate principal is around 54. In ten years I believe this average will have dropped into the late 30’s, early 40’s as many retire and leave the industry as well as the many younger people now entering the industry. A similar story for sales consultants - but to talk about our approach to this change would be too much information! 

 There will be many other changes, but I think these will be the most significant . . . . . . . but then, who knows what Google or Microsoft might do to totally turn it upside down!

Thailand – Some suggestions?

Irene and I plan to travel to Thailand next year. After 2 or 3 days shopping in Bangkok, we want to spend 7 days at a resort, with a beautiful beach, restaurants close by, maybe a town or two around with markets but above all else, somewhere great to relax.

Do you know of somewhere? Leave a comment and help us with your ideas. Thanks!

Technology, Microsoft and Databases

There’s been a lot of talk over recent years about the impact technology is having on business and everyday life.

Following the .com boom, and bust, technology companies and web site designers and developers have had a lengthy period where there has been little appetite from institutions or venture capital providers to get back involved. This has now all changed.

Once again we are seeing staggering growth in the technology companies and Internet players. Some recent examples highlight just how this area of business is once again booming.

Microsoft has 79,000 employees operating in 102 countries. As well as PC and business software, they are also involved in music players, X box, cable TV and many other areas. They have a current market capitalisation of $320 billion USD. A very impressive company!

They have just paid $240 million for 1.6% of Facebook, valuing that site/business at over $16 billion USD. A staggering amount of money. Facebook is a social networking site, owned by a 24 year old college drop out, currently with 300 employees. Microsoft aren’t sure how they will make money from it, just that they must have a stake in it.

This sale makes the earlier sale of Youtube.com at $1.9 billion USD look insignificant!

So, what does this all mean for us?

Technology is exploding. We must not only embrace it, but must passionately explore it, use it and make it an integral part of our business. And I guess it just highlights again, how valuable a data base is!

Thanks Sam, you are a techno guru! 

All Black Coach – We Never Learn . . . .

Reading the article on Stuff.co.nz this morning quoting John Hart regarding the future All Black coach, you really have to wonder about his thought process and that of the NZRFU.

We all understand how important, rightly or wrongly, rugby is to NZ. There is enormous expectation every time the All Blacks run out on to the field. We expect them to win, and get very depressed and angry when they don’t. Never more so than the World Cup. We seem to be becoming the Brazil of World rugby – win more than any other nation, more often than not ranked number 1 in the World, and yet apart from the very first rugby World Cup in 1987, never win the World Cup.

This year there was more anticipation than ever before. We looked best positioned ever to win,  and yet we bowed out in the quarter final, the worst ever performance at a World Cup. It is natural that we look for a reason, who can we blame. In the past we have been brutal with our coaches – the last 2 World Cups after losing in the semi finals the coaches have gone paying the ultimate price for the result. And with them went all the intellectual property they had gathered, all that they had learnt in the lead up to the cup. And yet, here we go again.

Graham Henry, Wayne Smith and Steve Hansen have done a great job with the All Black team. Henry is the second most successful coach ever, and has had far more games than the most successful. They have been playing outstanding rugby – they hold the Tri-nations Trophy and Bledisloe Cup. They beat Scotland by 40 points and didn’t concede a point – in the 1987 World Cup that they won, they beat Scotland 30-3 in the quarter final.  I can remember when you watched them play Wales, England, Ireland or Scotland in the past and it was 50/50 whether they would win. The team is still generally very young, and a majority are likely to be around in 2011 for the next World Cup.

So why would you sacrifice Henry and Co now? They’ve been through the whole process, with the team, understand and have experienced the lead up, the knock out pressure and probably most significantly have felt what it is to lose a quarter final. Why would we simply do what we’ve done before and throw all that away and start again? It hasn’t been successful in the past, why do we think it would be now?

It may be too late, but I do hope Graham does stand again and that he gets the support to retain the coaching role. He has done a superb job, and can only be even better for the experience.

Sport and Business – So Different?

Watching a programme on Channel 9 recently, 20/1 Great Sporting Finishes, it really brought home to me the difference between first and not, and just what you need to do to succeed. At the top level of sport, the basic skills are very similar, so it becomes far more in the preparation and in the mind, and the gap between first and not becomes very small.

In the USPGA a few years ago, the difference between the number 1 and number 2 golfers was less than a third of a stroke per round, and yet the prize money difference was nearly a million dollars US.

The parrallels with business are obvious. Competition is just as strong, the difference between getting the business and not is often just as small. So what are the fundamentals of success in either business or sport? I believe they are -

1. Hard Work – there are no short cuts. Ability will get you so far, but the bottom line is you’ve simply got to do the work. Tiger Woods, arguably the greatest golfer ever, after every round in a tournament, went out to the practise fairway and hit more golfballs – including after the final round when he won his first British Open. Most of us would have had a beer after winning, not Tiger. We must be the best at what we do – have the technical knowledge and skill.
2. Persistence – the truly successful business people and sports people simply keep going – they hit the wall, but instead of stopping, they just push harder and keep going. It took Thomas Edison 10,000 attempts before he invented the light bulb. I might have lost interest after 5,000! No matter what the obstacle, we must just keep going.
3. Self belief – the truly successful have an inner confidence, a belief that they can achieve the goal, even while having moments of challenge, they still believe in themselves. Walt Disney had a dream, and while everyone told him he couldn’t do it, including his final school report card that described him as lacking imagination, he never stopped believing.
4. Courage – achieving great reward, often involves risk. Having done the work, having belief in themselves, being determined, all contribute to allowing a risk to be taken. The truly successful are risk takers – not foolhardy risk, but measured risk, and they do the preparation to ensure the probability of success is high – they have courage. Every top sports person shares that some courage – to step onto the field, into the ring or onto the course.

There are many other factors that contribute to success, but I think these 4 are the keys – and they are just as important for sports success as business success – and when you really think about it, success in life!

Starbucks – A Great Story

I recently read an excellent business book, The Starbucks Experience, written by Joseph Michelli. It is an easy read, with a great overview of the philosophies and strategies that have been used to create one of the most awesome businesses in the World – Starbucks.

In 1971 Howard Schultz opened The Starbucks Coffee, Tea and Spice store in Seattle, Washington. Today there are 11,000 Starbucks coffee stores around the World, with 5 opening every day of the year – and they’re all company owned! Operating in 37 countries, it averages 35 million customer visits per week and it’s customers, on average, return 18 times a month. It’s a phenomenal story.

So how do you enter an industry where there are literally stores everywhere and then totally dominate it?

There are 5 basic principles behind this business -

1. Make it your own – Starbucks have managed through many different strategies to have their employees, or partners as they are called, truly take ownership of the business.
2. Everything Matters – a manic focus on the detail.
3. Surprise and Delight – provide a great product and wonderful service, but do that little, unexpected extra!
4. Embrace Resistance – listen to the feedback, value criticism, learn and grow from it.
5. Leave Your Mark – corporate responsibility to the extreme – do a lot of good within the business, the local community and globally – be a responsible corporate citizen.

Great principles, which the book explores in detail by speaking with a huge number of Starbucks’ people as well as customers. But the overriding message for me, and one which seems to be common to all great organisations, is the unique corporate culture that has been designed and created, and then how those values have been adopted so well throughout the organisation. Focus on the internal, and when right, you never have to worry about the external.

If you’re looking for a Christmas gift, or Christmas read, this is a great book.

NZ Real Estate Agent’s Act Review

The NZ Associate Minister of Justice, Clayton Cosgrove, this morning released the main detail of the overhaul of the Real Estate Agents Act and it is, in the main, largely as expected.

I believe there have been both some excellent decisions taken, but also some very ordinary ones.

The new licensing and disciplinary regime plus the increase in fines and other penalties is excellent and overdue. The previous Act was outdated and needed being brought up to date. For the vast majority of our industry who are professional, work hard and provide outstanding service, this can only be a great thing if it helps weed out the shonks.

I am concerned at the ability of the body to properly investigate and deal with complaints in a timely manner unless they have people throughout the country, which in turn will create a serious cost structure. This same structure in Australia is not effective as they do not have the man power on the ground to properly deal with the investigative side of the complaints. The public have little confidence in this body. However, the Minister is adamant this structure will deal with complaints quickly and it will not create a whole new increased cost structure. Time will tell. 

The on-going, annual education requirements are excellent. Clearly times change, laws change, everything moves on, so it is vitally important that as an industry we continue to learn, improve and stay on top of these changes.

Retaining the ability for sales consultants to hold independent contractor status is also excellent. A change in this area would have had an enormous, negative impact on the industry, dramatically changing the entire nature of it.

The decision to make membership of the REINZ optional, I believe, is totally wrong, and will have long term ramifications. I have now worked in the Queensland real estate market for 10 years where membership is optional, having worked in the NZ market for 15 where it was compulsory, and there is no doubt in my mind that the industry and also the public suffers in Queensland because of it. The reality is that offices and individuals can and do operate under no direct authority or monitoring. The government body set up to monitor and control the industry is just too busy to deal with all the day to day issues let alone be proactive in having any impact. Unless the breach is significant, it is ignored. At least with compulsory membership there is a code of ethics and people are held accountable to it. With optional membership the shonks simply operate outside it.

I think the minister has got this part completely wrong, as I have already communicated through our formal submission on the act review. Doing this almost seems like punishment for an institute that is perceived to have not responded well enough to the ministers past admonishments. I hope that is not the case, because this I believe, is a poor decision.  

A Little Thought on Service.

Having recently travelled overseas, it gives you the opportunity for a different perspective on service delivery, as a customer not a provider.

It’s amazing the number of times you think – If they just did this, or did that, or added this, what a difference that would make to the customer experience.

A classic example in London, was returning a rental car to the depot at Heathrow airport. Trying to find the depot to drop the car off was a nightmare. There are roads going everywhere, roundabouts with 8 or 9 different roads off them and it seemed like a million cars on the roads in and out of the airport. On top of that, there are 4 different terminals and a cargo terminal!

Given that the vast majority of those driving the rental cars are tourists or visitors, unfamiliar with Heathrow, you would think even greater effort would be made to clearly direct you to the depot. But no, that would be too obvious! Instead, we drive around, not sure where we we’re going, trying to see a sign (in amongst the hundreds of others) narrowly avoiding accidents, being tooted at constantly – although the other drivers are quite friendly, constantly waving – and you end up having an argument with your navigator! (Paul drove through the same tunnel 3 times!)

It seems so obvious. Put a huge ‘Return Rental Cars This Way” sign (all the companies depots are in the same place), and then lots of arrows. It would vastly improve congestion at the airport, speed up return times and create a positive consumer experience. The financial savings would be significant forgetting what it might do to customer numbers and loyalty.

So, what does this mean for us?

Two things I believe. Firstly, ask yourself regularly, what could we do to create a better, easier, faster or more valuable client experience? And secondly, constantly ask our clients – what could we have done differently that would have created a better experience and what did we do that you didn’t appreciate?

So often the small, obvious things are the easiest to fix, but the most often overlooked!