In his book Good to Great, Jim Collins preaches the fact that to achieve greatness you need to get the right people on the bus. That when all is said and done it boils down to having the right people going the same direction as the company and with sound leadership and coaching to make it all happen.

This same central theme was certainly apparent at the recently concluded “Gathering of Eagles” sponsored for the 15th year by Real Trends. Presenters discussed the importance of the people that make up the real estate business and the importance of creating an environment in which they can achieve success and greatness. Yes, the conversation continued about how technology has and will continue to alter the industry but the plain fact is that it is not the panacea to the business of helping families sell and buy their homes. Technology is another and major tool by which information flows but the relationships that our agents foster and the relationships that we as brokers continue to cultivate continues to be how this business conducts itself.

Data from Real Trends gathered over the years and the recently completed national study on Top Performing Companies points out some significant barometric readings that should cause us all to re-focus our energies and talent if we are going to keep the bus heading in the right direction and make this a “great” business to call our own.

First is the fact that last year (2002) the Real Trends 500 Largest Brokers in America combined for over half of the total transactions reported by the National Association of Realtors at 2,866,341 revenue sides. The per person productivity was 11.9 revenue units per agent for these same companies. These same Top 500 companies produced 2,641,137 units the previous year but averaged 12.22 units per person. This productivity has not increased in the last 5 years. What have we done with technology over the past 5 years?

We have added more brick and mortar (or was it granite and marble?) and made our offices larger to accommodate agents with assistants and the necessary space for the added technology. On average, our offices have expanded from 39.6 agents per office five years ago to 45.9 agents per office last year. The offices are doing more transactions but the productivity per agent has not really gone up. What has, somewhat artificially, propped up the agents is the increase in the average sales price. But it should have. Haven’t we had one of the strongest real estate market runs for the last 10 years?

Of significant note is a look at the top 100 brokers in the Large Broker Report. These brokers reported an average of a 5 basis point drop in commission per revenue unit and on average, last year’s agent earned nearly $2000 less in gross commission dollar than in 2001.

Two of the many findings of the Top Performing Company report were that there is a direct correlation between per person productivity and profitability percentage of gross commission income. Profitability showed no relationship to the size of the offices! Of further consequence was the fact that the most profitable companies were either big or small. There was not much room in the middle for profitability. Did we already assume this? For years it has seemed that one had to either shrink or stay highly concentrated in a given market or grow to a size that simply overwhelmed all others. This assumption has been born out.

But let’s talk per person productivity. Since the numbers reflect a flat line over the years on productivity what are some of the reasons and what would happen if we re-directed some of our energy and resources to the area that matters the most? The agent remains the greatest asset in this service business. Perhaps it is time to develop a vision of where we want our agents to be and not where we want our technology to go.

Larry Kendall of The Group in Ft. Collins Colorado shared his thoughts at the concluding session of the Real Trends conference about vision and focus. How athletes and others have achieved what many thought was impossible or simply beyond one’s capabilities. If we keep believing that productivity is a number that will never go above 12 per agent….it never will. The Group is a 265 agent/owned independent company that averages in excess of 25 units per person per year and they are working on a vision and focusing on how they are going to get that number even higher.
Jack Fry, owner of Remax of Reading (PA.) shared with the breakout session on “Benchmarking” how he developed his vision in 1994 in increasing his agent productivity. Last year his 94 agent firm averaged over 40 units per person, tops in the To Performing Company study.

Those who achieved or are on their way to achieve greatness and performed at the 80th percentile in the To Performing Company Study have set the standard. These companies, on average produced 26.7 units per person for 2002. It can be done. Re-focusing and creating a new vision for our companies and raising the bar on acceptable performance is where it has to start. It has to start with us. And this new vision is not something that looks only to next year. These may be 5-10 year goals. The challenge is to see that far into the future of what we all want to achieve for our companies. When our agents win and achieve their dreams then it seems that we achieve ours as well.

2003 is half over. What do we want to make of our companies for 2010? What can we do with our resources (financial and human) to get a better return on investment? Perhaps a shift from certain line items to ones that become harder to measure except by human performance. We need to recruit better people to our “bus” and retain them more as valuable assets. We need to train them now and on a regular basis and to “coach” them to higher achievements. Our managers need to have an alternative mind set and get rid of the “head trash” and believe in the vision of the company and office. We need them doing less paperwork and more peoplework.

The results can be measured. There may be little to notice in year #1 but the results will pay enormous dividends for the future. What better way to retain good people than to helping them achieve beyond good to great!